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Forex EUR/USD: investors carefully filter the news

EUR/USD, currency, Forex EUR/USD: investors carefully filter the news

FOREX fundamental analysis for EUR/USD on October 25, 2022

Investors are trying to use any more or less significant positive reason to justify the upward movement of EUR/USD. This is the appointment of Rushi Sunak to the post of the British Prime Minister, the disappointing data on the US business activity and the hope that the Fed will not raise the rate by more than 50 basis points in November.

As for analysts, 86 out of 90 experts polled by Reuters are predicting a rate hike of 75 basis points on November 3, while not ruling out further resetting the rate of monetary restriction.

Once again, the markets are wishful thinking. Even if the Fed slows down monetary policy tightening, it does not mean a pause or abandonment of the hawkish course. According to experts, in order for the regulator to adjust monetary policy, inflation would have to slip from the current 8% to at least 4.4%.

But now the proponents of easing are presenting the recent statistics on U.S. business activity, which has been declining for the fourth month in a row, as an argument.

Investors have even chosen not to react to the weak Eurozone purchasing managers' indices, although business activity is signaling a recession in the European economy.

Actually, PMIs are getting weaker all over the world, which suggests that the economy is in a global recession, and that is a serious factor to support the dollar. But so far investors are reacting vividly to the short-term drivers, like the stock indices rebound or the end of the political crisis in Britain.

Also the expectations of ECB rate hike by 75 basis points support the euro growth. Moreover, there are rumors in the market that the European regulator will launch a quantitative tightening program. On the other hand, the rate differential between the ECB and the Fed is so obvious that it is unlikely to allow EUR/USD to move to a long-term strengthening. Trading from forex levels suggests selling the pair on the rise to 0.992; 0.996 and 1.0.

 

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EUR/USD: dollar is still undervalued
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Dec 24, 2024 Read
USD/CHF: Swiss inflation may reach zero
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Dec 23, 2024 Read
Forex analysis and forecast for NZD/USD for today, December 23, 2024
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Dec 23, 2024 Read
EUR/USD: dollar will continue to strengthen next year
EUR/USD, currency, EUR/USD: dollar will continue to strengthen next year FOREX Fundamental analysis for EUR/USD on December 23, 2024The market was so afraid of the FOMC's December forecasts that it began to wonder if the Fed had completed its monetary easing cycle. This caused the EUR/USD pair to fall to a two-year low. However, the slowdown in the growth of the American index of personal consumption expenditures (PCE) and the dovish statements by the Fed representatives somewhat dampened the ardor of the bears. Even Donald Trump's threats against the EU could not affect the dynamics of the pair.In November, PCE grew by only 0.1%, which was the lowest since May. The core index also slowed to 2.8% year-on-year. The head of the Federal Reserve Bank of New York, John Williams, insists on further rate cuts, and Mary Daly from the Federal Reserve Bank of San Francisco agrees with the forecast of two stages of policy easing in 2025. Austin Goolsbee of the Federal Reserve Bank of Chicago assumes that the cost of borrowing will decrease over the next year and a half.Even the words of Cleveland Fed President Beth Hammack, who voted to keep the rate at 4.75%, did not alarm investors. She believes that further rate cuts are possible if inflation continues to slow down. The drawdown of PCE to 0.1% supports the likelihood of policy easing as early as January. Derivatives have reduced the probability of a pause in the Fed's actions from 95% to 89%.Despite the rise in yields on Treasury bonds and US stock indices, the EUR/USD bulls remain active. Even Donald Trump's statement about possible tariffs on the EU if Europe does not increase purchases of oil and gas from the United States did not cause them serious concerns. This looks strange against the background of the EU's policy of abandoning Russian gas and expanding the share of American LNG to 48%.Although the EUR/USD bears have temporarily retreated, their positions remain strong. HSBC analysts do not expect the dollar to weaken in 2025. Manulife Investment Management sees the need to improve the global economy in order to reduce the USD index, but there are no signs of this yet. Deutsche Bank predicts a decline in the EUR/USD pair to the parity level.We recommend using EUR/USD pair corrections followed by a rebound from the resistance levels of 1.0465 and 1.0500 to form or strengthen short positions.
Dec 23, 2024 Read
AUD/USD: inflation is rising in Australia
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Dec 20, 2024 Read
Forex analysis and forecast for USD/CHF for today, November 20, 2024
USD/CHF, currency, Forex analysis and forecast for USD/CHF for today, November 20, 2024 On Friday, USD/CHF shows versatile fluctuations near the level of 0.8980. After testing local highs in early July, the asset declined amid the publication of fresh macroeconomic data from the United States.The Philadelphia Federal Reserve's index of business activity in the manufacturing sector unexpectedly fell from -5.5 to -16.4 points in December, although analysts had forecast an increase to 3.0 points. The personal consumption expenditure price index increased by 1.5% in the third quarter, and its base version rose from 2.1% to 2.2%. Initial applications for unemployment benefits decreased from 242 thousand to 220 thousand, which turned out to be better than the forecast of 230 thousand, and the number of repeat applications decreased from 1.879 million to 1.874 million, also exceeding expectations. In addition, sales in the secondary housing market increased by 4.8% in November, reaching 4.15 million against the forecast of 4.07 million.Swiss statistics reflected a decline in trading activity. Exports decreased from 27.826 billion to 23.682 billion francs, while imports fell from 19.801 billion to 18.257 billion francs, reducing the trade surplus from 8.025 billion to 5.424 billion francs. According to SECO, the Swiss economy is expected to grow by 1.2% in 2023, 1.6% in 2025, and 1.7% in 2026, which is lower than the average annual growth of 1.8%. Experts see the main driver of the recovery in domestic demand, as demand for Swiss goods in Germany and China continues to decline.Investors also continue to analyze the results of the US Federal Reserve meeting on December 18. As expected, the rate was reduced by 25 basis points to 4.50%. The regulator's new forecasts suggest a rate cut of 50 basis points in 2025, which differs from the September expectations of three consecutive cuts of 25 basis points.USD/CHF technical analysis for todayJohn Murphy's technical analysis on the daily chart shows the expansion of the Bollinger bands, which opens up opportunities for a bullish trend. The MACD indicator indicates a steady buy signal. Stochastic also demonstrates an attempt to reverse downwards, signaling a possible overbought dollar in the short term.Trading recommendationssale with a confident breakdown of the 0.8957 level down. The target will be the 0.8900 mark. We will put the stop loss at 0.8990.buy will be possible if the 0.8957 level acts as support, and then the pair breaks the 0.9000 mark up. In this case, the prospect of growth to 0.9100 opens up. We will place the stop loss at 0.8957.
Dec 20, 2024 Read
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Dec 20, 2024 Read
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