EUR/USD derails as Fed suggests rate hike isn't over

After a bullish start to the day, which gave rise to place at a daily high at 1.0726, the EUR/USD took a downward path, falling back until the level reached 1.0726. a hollow at; 1.0660, and remaining close to this threshold this Friday morning.

Recall that the Euro Dollar was affected by multiple interventions by central bankers, the Fed and the ECB.

On the side At the ECB's meeting, the central bank's vice-president, Luis De Guindons, warned that any talk of rate cuts is “ “clearly premature”, emphasizing that the ECB has not yet achieved its objectives. However, he also declared that that « if interest rates are kept at the same level. their current level, inflation will continue to rise. lower and lower “converge towards our objective”, which implies that the institution does not plan to raise rates further.

Another member of the ECB Governing Council, Centeno, said: also made remarks yesterday along the same lines, affirming that « we are at this point a plateau in terms of interest rates ».

On the side of the Fed, the declarations were on the contrary distinctly hawkish. Bostic, for example, declared: the Fed will keep its rates at a restrictive level up to so that it can be sure that inflation returns to normal. 2%.

Barkin said: emphasized to him that « “the US economy is remarkably strong”, and that he is not convinced that inflation is heading towards the 2% target, believing that the economy must decline in order to “accelerate”. beat inflation ».

Kathleen O'Neill Paese, the interim president of the St. Louis Fed, was appointed. even clearer, by affirming that it is « too early to rule out further rate hikes”, and that it is “ too early to declare victory against inflation ».

Last, but certainly not least, Fed Chairman Jerome Powell pressed the issue. the highlight, by admitting that the Fed is not confident that it has tightened sufficiently. its policy, asserting that the Fed « will not hesitate » if it becomes appropriate to tighten further.

Note that although these comments did not call into question the prospect of a new monetary status quo for the next Fed meeting in December, they do have clearly rejected expectations of rate cuts for 2024, as evidenced by the Fed rate barometer.

In this context, it is therefore not surprising that the EUR/USD pair has weakened, and it is also not excluded that the fall will continue this Friday, although no speech from the Fed or the ECB be scheduled.

Indeed, the only important event for the Euro Dollar in the economic calendar this Friday will be the US consumer confidence index according to the University of Texas. of Michigan.

Technical thresholds at monitor on EUR/USD

From a graphical point of view, we recall that the decline of the EUR/USD in recent days seems to be part of a rejection from the upper limit of ;a bullish channel visible since the beginning of October.

À In the short term, the threshold of 1.0660 is the first support for the future; take into account. Then the area of ​​1.0630 and then the psychological threshold of 1.06 will come into play.

À On the upside, 1.07 is an immediate hurdle, ahead of Monday's top around 1.0760, then the 1.008 area, where the 1.008 area remains high. lies at the 100-day MA (1.0793) and 200-day MA (1.0801).

EUR/USD derails as Fed suggests rate hike is not over  

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