The G20 summit took place in Bali, Indonesia, on November 2022…
EUR/USD skyrocketed ahead of ECB’s speech
Information is not investment advice
The euro has started the week on a positive footing, surging to the key resistance of 1.1800.
Tailwinds of EUR/USD
- Pfizer announced that the vaccine may be launched by the end of this year. That optimistic news improved the market sentiment after Johnson & Johnson halted the vaccine trial last week.
- House Speaker Nancy Pelosi sets the 48-hour deadline to unveil the fiscal stimulus before the US election. After that global stock surged, adding to the overall risk-on sentiment.
- As a result, the safe-haven US dollar waned amid the upbeat investor’s mood, driving EUR/USD up.
Headwinds of EUR/USD
- New virus cases have sharply risen in the Eurozone, forcing countries to tighten up restrictions. France has reported 30 000 new daily cases over the past 24 hours.
- China has reported worse-than-expected GDP for the third quarter, but other less important indicators from the second-largest economy exceeded expectations.
EUR/USD has approached the 50-day moving average of 1.1180. The move above this level will drive the price towards October’s high of 1.1830. The RSI indicator signals the further rising as it has just crossed the midpoint. If it manages to break out 1.1830 as well, the way to the peak of mid-September at 1.1860 will be clear. Support levels are 1.1700 and 1.1650.
All eyes on speeches of Fed’s Powell and ECB President Lagarde at 15.00 and 15:45 MT time! If one of the central banks is pessimistic, points to bumpy recovery, and hints for further easing or lowering rates, it will drive its currency down. Otherwise - the optimistic comments and no clues for more easing will drive the currency up.
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.