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EURUSD: Trump has halted the dollarís slide

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  • EURUSD: Trump has halted the dollarís slide

    On Thursday the 25th of January, trading on the euro closed down on a day of high volatility. Sharp price fluctuations were seen on the major currency pairs as a result of comments from Trump, Mnuchin, Draghi, and Jordan.

    After hitting a new high in the European session, the euro entered a sideways trend leading up to Mario Draghiís press conference. There wasnít much of a reaction to the initial decision. The ECB meeting on monetary policy concluded with decisions to maintain the refinancing rate at 0.0% and the deposit rate at -0.4%.

    The QE program is being maintained until September at a volume of 30bn EUR a month. This could be extended should the need arise. Interest rates are expected to remain at their current level for the long term. Should the economic conditions in the Eurozone get worse, the scale of the program could be increased.

    Mario Draghi noted that the Eurozoneís economy is growing faster than expected. Volatility on the single currency is a current source of uncertainty and so stimulus programs need to be maintained in order to keep inflation up. Inflation over the next few months is set to remain around its current level.

    The euro/dollar pair jumped on Draghiís comments as the Eurozoneís economy grows along with the euro. Euro bulls received some additional support from Thomas Jordan, the chairman of the Swiss National Bank, after he told reporters that the SNB was ready to intervene in the Forex market if needed. This would be on the EURCHF pair to weaken the national currency.

    Donald Trump halted the dollarís slide during the US session. In an interview with CNBC, he said that traders had misinterpreted Steve Mnuchin and taken his comments about a weak dollar out of context. The euro then dropped by nearly 200 pips from 1.2537 to 1.2364 (-173 pips).

    I have no desire to analyse markets when they react so strongly to verbal interventions because at times like these, the major players rely on crowd psychology to guide their trading. Also, we donít know what other statements we could get from officials. It was enough just for Trump to say that Mnuchinís comments were misinterpreted for the euro to slump by nearly 200 pips.

    The price has returned from the zone between U3 and U4 to the LB balance line (sma 55). This marks a drop of 135 pips, and now the euro is trading at 1.2450. Given that the euro has dropped below 1.2389, thereís a chance of it correcting even lower on the daily pin bar with a long upper shadow. Moreover, the target of 1.2533 has been reached on the monthly timeframe.

    My forecast has the euro recovering to 1.2475/80. If it stays with the trend, the price could rise as far as 1.2503, so donít be in too much of a hurry to short the euro if thatís what youíre planning to do. Once a certain level is reached, you need to look at trader sentiment towards US bonds and euro crosses.Source:

  • #2
    The EUR/USD pair faded an yet to be a European session bullish spike and unexpectedly retreated re 50-pips from to an intraday high level of 1.1830.

    The pair initially was seen building coarsely its overnight recovery pretend to have from 6-month lows and benefited from the ongoing US Dollar profit-taking slide. The taking place-put on, however, ran out of steam, behind continued diplomatic uncertainty in Italy capping subsidiary gains.

    The latest leg of headache slip beyond the gathering hour or for that excuse could be news reports that Paolo Savona, an 81-year-old economist and former minister as soon as Euro-skeptic views, will be designated the Minister of the Economy and Finance.

    The downfall, so far afield-off, has been limited and the pair has managed to maintain its neck above an intraday low level of 1.1756, touched earlier during the Asian session. Moreover, close-term oversold conditions furthermore seemed to decline to vote traders gain from placing rough bets ahead of Wednesday's important releases, including the flash financial credit of Euro-zone PMI prints and the latest FOMC meeting minutes.
    Last edited by RusefSandi; 05-22-2018, 05:02 PM.


    • #3
      The euro hit two-week highs re Wednesday after upbeat comments by a senior European Central Bank attributed, even though the Canadian dollar gained, but remained knocked out pressure along amongst concerns remote than heightened trade tensions.

      EUR/USD was happening 0.42% to 1.1760 by 03:49 AM ET (07:49 AM GMT), the highest level since May 23.

      The euro was boosted after the ECB Chief Economist Peter Praet said officials are increasingly confident that inflation is rising to facilitate taking place towards the banks perspective toward and will neighboring week debate whether to begin gradually scaling at the forefront uphill its asset get sticking to of program.

      The explanation came after reports overnight that the ECB's June meeting could see a poster in the region of gone its monetary stimulus program would decrease.

      Many traders had believed the bank would retain off harshly speaking giving any postscript manage auspices this month together plus uncertainty caused by embassy developments in Italy.

      The euro climbed to two-week highs adjoining the yen, also EUR/JPY rising 0.68% to 129.45.

      The dollar was after that merged contiguously the yen, as soon as USD/JPY taking place from 0.28% to 110.08.

      Demand for the dollar continued to be underpinned after hermetic U.S. employment data around Friday cemented expectations for a June rate hike by the Federal Reserve and revived expectations for a fourth rate hike this year.

      The Fed is widely respected to lift appeal rates at its upcoming meeting adjacent week, behind on the subject of from its last rate hike in March.

      The pound moved to the fore-thinking, taking into account GBP/USD rising 0.22% to 1.3419, having risen 0.71% regarding Tuesday.

      Sterling was boosted by facilities data indicating that the British economy is showing signs of recovering from its recent slowdown, reviving expectations that the Bank of England might lift assimilation rates in August.

      The Australian dollar hit one-and-a-half month highs overnight after data showing that the country's economy rebounded in the first quarter. AUD/USD was last at 0.7650, not in the disaffect away from an overnight high of 0.7672.

      The Canadian dollar pushed higher, subsequent to USD/CAD slipping 0.2% to 1.2944, pulling away from Tuesdays two-month highs of 1.3066.

      The loonie and the Mexican appendix fell hastily upon Tuesday taking into consideration reports that U.S. President Donald Trump is bearing in mind holding sever trade talks as soon as Mexico and Canada, fueling speculation that the U.S. could terminate from the North American Free Trade Agreement.

      The Mexican peso was near 17-month lows neighboring to the U.S. currency, subsequent to USD/MXN at 20.41 after rising 1.65% on Tuesday.