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EUR/USD: Non-farm Payrolls will Help Investors

EUR/USD, currency, EUR/USD: Non-farm Payrolls will Help Investors

EUR/USD Trading idea for September 1, 2023

Artem_deevcentral banks are in no hurry to raise rates, although inflation, for the most part, is in no hurry to decline, and weaker economies lose out from this. So, contrary to Bloomberg forecasts, the Eurozone CPI grew not by 5.1%, but by 5.3%. Nevertheless, EUR/USD and forex crosses with the euro sharply went down, blocking all the buyers' achievements for Wednesday.

In the United States, the head of the Federal Reserve Bank of Atlanta, R. Bostic, made a "pigeon" speech, believing that the rates are already high enough and there is no point in injuring the economy with an additional act of monetary restriction. The same opinion is shared by Hugh Pill, chief economist of the Bank of England, and Isabel Schnabel, a member of the ECB Governing Council, who said that raising rates would cause great damage to the economies of the UK and the Euroblock. It is noteworthy that Isabel Schnabel is one of the most active "hawks" of the ECB. In other words, in the US, the UK, and the Eurozone, voices of opponents of tightening financial conditions are increasingly being heard, which, of course, will be taken into account at the meetings of regulators.

In such a situation, the dollar feels more confident than sterling or the euro. Moreover, on the eve of its strengthening, American statistics supported it. Household spending in July increased by 0.8% (mom), and this is the best indicator since the beginning of the year. The index of personal consumption expenditures rose by 0.2% (mom). Of course, the American economy is signaling a slowdown, but it is unlikely to plunge into recession. This is much better than the situation in the Eurozone with the expanding risks of stagflation.

Rumors that both the Fed and the ECB are ready to complete the cycle of monetary restriction, as well as the divergence of economic growth between the US and the Eurozone, are beneficial to buyers of the dollar. Bloomberg lowered the EUR/USD forecast for the end of the year from 1.12 to 1.10. JP Morgan and Bank of America see the pair at 1.05, BNP Paribas – at 1.02.

But, it should be remembered that the main "bearish" factors have already been taken into account by EUR/USD quotes. The deterioration of US economic indicators will bring back to the market the idea of an approaching recession and the associated "dovish" reversal of the Fed. But if the situation does not change dramatically, then the dollar has a good chance of strengthening. The release of Non-farm Payrolls will clarify the situation in many ways

Bloomberg expects employment at the level of 170 thousand places. This is the lowest value of the indicator since January 2021. If the statistics disappoint investors, EUR/USD will return to 1.09. If the report is stronger, the pair will go to 1.08.

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EUR/USD: markets are waiting for the ECB's decision on rates
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Jul 18, 2024 Read
Forex analysis and forecast for GBP/USD for today, July 17, 2024
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Jul 17, 2024 Read
EUR/USD: Forex currency trading has become dependent on Trump
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Jul 17, 2024 Read
USD/JPY: the Bank of Japan could not stop the fall of the yen
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Jul 16, 2024 Read
USD/CHF: the pair retains its strengthening potential
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Jul 16, 2024 Read
EUR/USD: the pair balances between political and economic risks
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Jul 16, 2024 Read
AUD/USD: the Australian economy is recovering steadily
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Jul 15, 2024 Read
Forex analysis and forecast for USD/CAD for today, July 15, 2024
USD/CAD, currency, Forex analysis and forecast for USD/CAD for today, July 15, 2024 USD/CAD is testing the 1.3657 level to break down before the release of important macroeconomic data from Canada.Tomorrow at 14:30 (GMT+2), the June inflation report will be published, which will play a key role in the Bank of Canada's monetary policy decisions. The annual consumer price index is expected to decrease from 2.9% to 2.6%, and the monthly indicator will accelerate from 0.1% to 0.3%. Core inflation is projected to decrease from 1.8% to 1.6% on a monthly basis and from 0.6% to 0.4% on an annual basis. This may allow the Bank of Canada to move to a more lenient policy, which will support the economic recovery by lowering interest rates, stimulating consumer spending and investment. On the same day, data on the volume of new home construction will be published, the indicator of which is likely to decrease from 264.5 thousand to 260.0 thousand, which may put pressure on the Canadian dollar.Analysts believe that the Bank of Canada will act more decisively than the US Federal Reserve on the issue of lowering rates. The Fed is expected to start cutting rates in September, with two adjustments before the end of the year, while the Canadian regulator will reach the level of 3.00% by the end of next year, while in the United States only by the beginning of 2026.On the daily chart, technical indicators give preference to sales. The Alligator indicator turns the moving averages down. Awesome oscillator forms descending bars in a negative rangeShort positions can be opened with a confident breakdown down to the 1.3600 level with a target of 1.3480. We will place the stop loss at 1.3680.Purchases will be relevant when the 1.3680 level breaks up. The target is -1.3780. We will make a stop loss of 1.3620.
Jul 15, 2024 Read
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