FOREX Fundamental Analysis for EUR/USD on October 14, 2022
After the U.S. inflation report was released, the Dow Jones index first lost 500 points and then quickly recovered to 800. Financial markets are very sensitive to the U.S. macroeconomic statistics, but no one expected that the release would bring losses to EUR/USD sellers.
Core inflation in the United States rose from 6.3% to 6.6%, which was higher than the forecast of 6.5%. The pair fell by 100 pips and was caught by the buyers, who created a fear so that the "bears" quickly took profits in the shorts.
Nevertheless, the dollar remains the safest defensive asset and the demand for it will decline only when the world economy recovers from the bottom. Even a slowdown with rising rates (for which there is actually no reason, on the contrary) will not be enough conditions for the greenback to turn around.
Citi recommends buying the dollar, and I think the analysts are right. We do not expect a global intervention, like in 1985, and it should be said that at that time the U.S. itself participated in the operation. Now the decline of the dollar is not beneficial to the Fed. Why else would the regulator raise rates?
I think the greenback will continue to strengthen for another 6-9 months. The Fed has not finished its work, and the market is going against it again. We know where this will lead. We continue to sell EUR/USD with the nearest target at 0.95.
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USD/CAD trading idea on January 22, 2025In Asian trading on Wednesday, USD/CAD maintains moderate growth, trading near the level of 1.4330. Against the background of recent events, the pair reached a 2020 high at 1.4515. This surge was caused by statements by US President Donald Trump about the possible introduction of 25% tariffs on Canadian exports from February 1.Canada, being the second largest trading partner of the United States with an annual turnover of about $ 600 billion, is under pressure due to the proposed duties. The main impact could be on the country's automotive industry, given that a significant part of the Canadian automotive industry is focused on the US market. Analysts predict that such tariffs could result in annual losses of more than $30 billion for the sector, and Canada's GDP could lose 0.5% or more.Additional pressure on the Canadian economy is exerted by the national emergency declared by Donald Trump in the energy sector. The new measures include simplifying the issuance of drilling permits and lifting restrictions on oil production in strategically important areas such as the Arctic. These actions are aimed at restoring the US national oil reserve, depleted during Biden's presidency. Increased oil production in the United States poses risks to the Canadian oil sector, one of the country's key export destinations.An additional factor of pressure on the Canadian dollar was the inflation report for December. The consumer price index (CPI) decreased by 0.4% on a monthly basis, against zero dynamics in November. The annual rate also slowed from 1.9% to 1.8%, raising doubts about the Bank of Canada's ability to achieve its 2% inflation target.Weak macroeconomic data reinforces expectations that the Bank of Canada may cut rates further at its next meeting in late January, possibly in increments of 50 basis points. If the forecasts are confirmed, the Canadian dollar is likely to continue to lose ground. John Murphy's technical analysis also confirms this scenario.Trading recommendationsUSD/CAD remains in the bullish zone, with the potential for further growth. In the event of an escalation of the trade conflict or increased expectations of monetary policy easing by the Bank of Canada, the pair may reach new local highs. Based on the above, we have placed a pending order for USD/CAD:• Buy Stop: 1.4350• Take Profit: 1.4550• Stop Loss: 1.4280 
On Wednesday, GBP/USD held its position near the 1.2345 mark, which is the maximum on January 9, demonstrating stability even against the background of mixed data on the UK labor market.Recent reports show that the number of applications for unemployment benefits increased by 0.7 thousand in December after a decrease of 25.1 thousand a month earlier, which turned out to be much worse than the expected 10.3 thousand. The employment rate increased by 35,000, which is significantly lower than the previous growth of 173,000. Data from the Office for National Statistics of Great Britain for November indicates an increase in regular wages by 5.6% year-on-year over a three-month period, which exceeds the previous figure of 5.2%. This indicates the continuing inflationary pressure in the country's economy.However, analysts expect the Bank of England to continue cutting interest rates in February, although the pace of reduction may slow down. According to the OECD forecasts, the Bank of England's interest rate may increase by 2026. Alan Taylor, a member of the Monetary Policy Committee, noted that the regulator's current policy assumes four rate cuts of 25 basis points each by the end of 2025, which will lead to a rate of 3.75%.On Friday, January 24, the GfK consumer confidence index and business activity data from S&P Global are expected to be published. The consumer confidence index is expected to decrease from -17.0 to -18.0 points, while the business activity index in the manufacturing sector may rise from 47.0 to 47.1 points, and in the services sector it will decrease from 51.1 to 50.6 points. In the United States, similar data may show a decrease in activity in the service sector from 56.8 to 56.6 points, and a slight increase from 49.4 to 49.6 points is possible in the manufacturing sector.On the daily GBP/USD chart, the Bollinger Band indicator is narrowing, indicating a decrease in volatility and mixed trading sentiment in the short term. The MACD indicator shows a confident buy signal, being above its signal line. Stochastic shows an upward trend, but is close to the overbought zone, which may signal a possible correction.Traders are advised to consider long positions when breaking up the 1.2359 level with a target level of 1.2500 and a stop loss at 1.2300. Sales will be relevant when the pair rebounds from the 1.2359 level and breaks up 1.2300. The nearest target will be 1.2200. We will set the stop loss at 1.2359. 
USD/CHF showed steady growth, breaking the levels of 0.8950 and 0.9000. However, after testing the 0.9200 mark, the pair moved to correction.The 4-hour chart (H4) shows that USD/CHF has dropped to the level of 0.9050 and retains the potential for further decline. At the same time, the pair remains well above the 200-period simple moving average (green line). If the bulls can seize the initiative, they will drag the quote to the nearest resistance, which is near the level of 0.9120.A descending channel is forming on the chart with resistance at 0.9120. The next important resistance is located near the 0.9140 mark. A close above the 0.9140 level may set the tone for further rooting of the asset towards the resistance at 0.9200. The key obstacle will be the pivot level of 0.9240.Consider the "bearish" scenario. The nearest support is at 0.9050, and the next is around 0.9020. A breakdown below these levels may lead to a decline in the pair to the level of 0.9000 and the 200-period simple moving average (green line). 
FOREX fundamental analysis for EUR/USD on January 22, 2025The adjustment of customs duties may be temporarily postponed, but their complete abolition is in no way part of the plans of the new US administration. Donald Trump clearly does not want shocks in the stock market, so he will gradually prepare the players for his actions. His recent statements about the possible imposition of 25 percent tariffs against Canada and Mexico starting in February, as well as 10 percent duties on Chinese goods, confirm this strategy. If these measures are implemented, the EUR/USD pair may return to a downward trend. However, is there any certainty about this?After the growth of the US dollar index by 7% since September, investors are faced with the question - is Trump's protectionist policy taken into account in the current exchange rate? Morgan Stanley is skeptical about the further strengthening of the dollar due to tariff risks, while Bank of America is confident that concerns about new duties will support the US currency. Even if the tariffs are postponed, they will remain an important element of the White House's economic policy.Brown Brothers Harriman, on the other hand, believes that tariff noise will not change the long-term bullish trend for the dollar. Import duties will only strengthen the existing growth drivers of the dollar index.This opinion has a logical basis. The dollar, as a safe haven asset, is strengthening amid rising volatility, which confirms its rally amid an increase in the US trade policy uncertainty index. Although universal tariffs were not introduced on inauguration day, this did not eliminate uncertainty, but only temporarily reassured investors.Investors should look beyond tariff discussions. All of Donald Trump's policies are pro-inflationary. Fiscal incentives will boost household incomes, deportations create labor shortages, and import duties disrupt supply chains. This may force the Fed to keep the rate unchanged for a long time.All other risks are nothing more than fears and speculation and have no effect on ingrained forex trading strategies. Recent rumors about US plans to strengthen currency controls and expand the list of currency manipulators may force other countries to strengthen their national currencies against the dollar. However, in the context of trade wars, states are usually inclined to devalue their own currencies to mitigate the negative consequences. Thus, the dollar should not be afraid of a significant devaluation.Donald Trump does not refuse to impose tariffs, but intends to prepare markets for innovation. In such circumstances, any growth in the EUR/USD pair will be temporary. An upward breakdown of the pivot level at 1.0445 may be a signal to build up long positions formed from the level of 1.0335. At the same time, traders should keep in mind the possibility of a reversal around 1.047 and 1.054.EUR/USD technical analysisPurchases of EUR/USD from the support area 1.0342 - 1.0333 have borne fruit. Yesterday, the bulls reached the first target in the area of 1.0384, and then the second at 1.0434. The next target in the short-term uptrend format is located in the Target zone of 1.0481 - 1.0453. If buyers break through this area and the pair gains a foothold higher, the growth may continue to the Golden Zone of 1.0554 - 1.0545.Long positions will be considered for correction from strong support levels. The key zones remain at the same levels, so if the price adjusts to them, then it will be possible to consider purchase transactions. 
Markets continue to closely monitor the first steps of Donald Trump in his debut week. It is expected that the US president will sign a number of decrees, which will preserve the dominant position of news from the United States for market participants. Country leaders and investors will have to reflect on the consequences of these decisions.In the United States, President Trump suspended funding for more than $300 billion worth of green infrastructure, paving the way for private investment in $500 billion worth of artificial intelligence infrastructure. He also said that the administration is discussing the introduction of a 10% tariff on goods from China, and the EU expects new customs tariffs due to the "alarming" trade surplus with the United States.Economic and market newsThe President of the United States continued to sign executive orders, including a freeze on hiring for federal positions, with the exception of the army and immigration services. He also announced the introduction of 25% tariffs on imports from Canada and Mexico from February 1, threatening the EU with tariffs due to the US trade deficit with Europe, suggesting either new tariffs or an expansion of oil purchases from the US by European partners as a possible solution.The leaders of the EU, Germany, Canada, China and Mexico called on Trump to exercise caution, pointing to possible retaliatory measures in the event of tariffs or other sanctions.In Germany, the ZEW index for January showed mixed results. The assessment of the current situation rose to -90.4 (forecast: -93.1), reaching a maximum in three months, which may indicate stabilization after a six-month recession. However, business expectations dropped to 10.3 (forecast: 15.1), indicating a decline in optimism about future growth. These data are unlikely to have a significant impact on the ECB's rate decisions in January and March.In the UK, the November/December labor market report was in line with expectations. The unemployment rate rose to 4.4% (previous: 4.3%), and the number of vacancies continues to decline, indicating a slowdown in the labor market. Wage growth remained high at 5.6% year-on-year for three months (forecast: 5.5%, previous: 5.2%). Most likely, the Bank of England will adhere to a gradual easing of monetary policy with another rate cut of 25 basis points in February.Stock marketAfter the inauguration of Donald Trump, global stock markets went up, which supported risky assets through currency correlation. Limited macroeconomic data and earnings reports also supported the positive sentiment. Investors perceived Trump's statements and about 50 executive orders signed by him as less negative than expected, leading to a rally amid reduced uncertainty that could continue if the 47th president refrains from further threats, especially regarding tariffs against China and Europe.In the US, the Dow index rose by 1.2%, the S&P 500 by 0.9%, the Nasdaq by 0.6%, and the Russell 2000 by 1.9%. Asian markets are mostly growing, especially in Japan, but Chinese markets are reacting negatively to Trump's statements about tariffs. US and European stock futures are trading in the black this morning.BondsEuropean rates ended the day with a slight decrease, with German 10-year bonds trading at 2.51%. This reversal could be due to the fact that Donald Trump did not announce a massive tariff plan during the inauguration.The foreign exchange marketYesterday, the US dollar remained under pressure amid a lack of immediate action from Trump on key issues, including import tariffs. SEK and GBP showed growth along with EUR. The EUR/USD pair ended the day above 1.04, which indicates the potential for further growth, while EUR/SEK closed the day below 11.50. 
On Tuesday, AUD/USD is correcting within the framework of an uptrend, trading near the level of 0.6247 against the background of the weakening of the US dollar. Despite the publication of data on the Australian labor market, AUD/USD remains neutral.According to the Australian Bureau of Statistics (ABS), in December, unemployment remained unchanged at 4.0%, and the number of unemployed decreased by 4.0 thousand to 604.9 thousand. Employment increased by 31.0 thousand to 14.573 million, which is 2.8% higher than in December 2023. The employment-to-population ratio remained at 64.4%. At the same time, full-time employment decreased by 23.7 thousand to 10.037 million, and part-time employment increased by 80.0 thousand to 4.546 million. The total number of hours worked increased by 0.2% or 4.0 million. These data indicate a smooth recovery in the sector, despite high interest rates.The US dollar index is trading at 108.00, which is below the annual high of 109.80. Donald Trump's official inauguration as president of the United States did not lead to drastic changes in forex trading methods. In his inaugural speech, Trump repeated his plans to change tax and trade policies, indicating that new tariffs could be introduced no earlier than February 1. Uncertainty in the implementation of promises limited the growth of the US dollar.AUD/USD Technical Analysis for todayOn the daily chart, the AUD/USD pair is correcting within the descending channel with dynamic boundaries of 0.6260–0.6050. Technical indicators slow down sell signals in correction conditions. The fast EMA lines of the alligator indicator are pointing up and approaching the signal line, while the Awesome Oscillator (AO) indicator shows growth in the sales area.Trading recommendations• Long positions: it is recommended to open when the level of 0.6300 breaks up with a target of 0.6450. The stop loss is placed at 0.6250.• Short positions: possible when the price decreases and fixes below the level of 0.6210 with a target of 0.6080. The stop loss is 0.6280. 
Upcoming events for the week of January 21-25, 2025This week, the economic calendar is relatively calm, and key events are scheduled for Friday, when data on the US PMI and sales in the secondary housing market will be published. These reports may give an idea of the state of the United States economy, but they are unlikely to disperse the volatility of currency pairs. At the same time, the Bank of Japan is expected to raise the interest rate from 0.25% to 0.50%, which is likely to cause significant fluctuations in the exchange rate of the yen and the Nikkei index.The main focus of the market will be on Donald Trump's first actions as president. Although the expected tightening of immigration policy is likely to have a limited impact on the market, any tariff announcements could significantly affect investor sentiment. If his comments hint at a trade war, it could raise concerns about global trade and negatively affect market stability. Traders will closely monitor his statements to determine the possible direction of the market movement.Trading Ideas this week• USD/JPY: it is recommended to consider selling opportunities, especially if the price breaks through the key support level at 155.00, which may pave the way for further decline. Special attention should be paid to the Bank of Japan's decisions, as any rate changes may increase volatility.• Bitcoin: the uptrend is gaining momentum, and bullish sentiment is returning after Trump's inauguration. A possible test of the $110,000 level and above is expected as traders seek new highs. Purchases near key support levels can offer profitable entry points for those who are set for further growth.• Crude Oil: the recent truce between Israel and Gaza, as well as Trump's rise to power, are reducing tensions in the Middle East. The weakening of geopolitical risks, combined with expectations of higher production in the United States, may contribute to lower oil prices. Traders should consider selling when prices rise, focusing on lower levels in the short term.• S&P 500: the index may continue to rise this week, fueled by the beginning of the Trump presidency and his "America First" policy. It is recommended to consider buying on pullbacks, as optimism around Trump's policy may continue to support the index. 
USD/CHF analysis on January 20, 2025On Monday, USD/CHF is working out a correction, signaling a possible continuation of growth. The asset is trading around 0.9127, against the background of low volatility of currency pairs due to the weekend in the United States.In December, the Swiss producer price index remained at 106.3 points, 0.9% lower than in December 2023, with an annual average of -1.7%. The increase in the cost of cocoa, chocolate products and coffee was offset by lower prices for pharmaceutical products, metals, semi-finished products and building materials. The slowdown in inflation in the manufacturing sector creates favorable conditions for the economy and supports the intentions of the Swiss National Bank to continue easing monetary policy.Despite the stability of the Swiss franc, recent fluctuations in the US dollar exchange rate have had little effect on the dynamics of USD/CHF. Currently, the US dollar index is at 108.90, approaching the annual high of 109.90. Investors' attention is focused on the inauguration of Donald Trump, who promises immediate changes in domestic policy. In addition, data on the US real estate market for December show a sharp increase in the volume of new home construction to 1,499 million, and the number of building permits issued amounted to 1,483 million, which reduces the likelihood of an early change in the monetary policy of the Federal Reserve System.USD/CHF technical analysis for todayOn the daily chart, the pair is approaching the resistance line of the ascending channel with dynamic boundaries of 0.9300–0.9020. Technical indicators indicate a possible strengthening of the buy signal. The lines of the Alligator indicator are diverging, and the histogram of the Awesome Oscillator (AO) indicator is forming correction bars in the positive zone.Trading Recommendations- long positions when the level of 0.9170 breaks up with a target of 0.9310. The stop loss should be set at 0.9120.- selling is advisable when the level of 0.9080 breaks down with a target of 0.8910. It is recommended to place the stop loss at the level of 0.9130.