EUR/USD explodes higher as US CPI shakes up rate expectations

EUR/USD exploded à The increase on Tuesday, starting the day just below the threshold of 1.07, to mark a peak at 1.07. 1.0888 in the afternoon, the highest since August 31.

Recall that the Dollar was sharply higher than the previous day. heavily affected by the data below the expectations of the American CPI, for the data « core » as for the basic data, in monthly data as in annual data:

Face to face These figures, expectations for the next Fed meetings have been very high. deeply affected, since investors are taking into account this Wednesday morning an almost zero risk (0.2%) that the FOMC will raise its rates on December 13, compared to around 15% yesterday morning.

Furthermore, expectations of rate cuts for 2024 have increased significantly, with more than a 30% chance that the Fed will lower its rates for the March 2024 meeting, compared to less than 10% the day before.

This Thursday, the calendar of important statistics for EUR/USD and forex in general will remain busy, including the price index production and US retail sales.

Then, the Tomorrow's day, Thursday, will be driven by weekly US unemployment claims, as well as the Philadelphia Fed's manufacturing index.

Important technical thresholds for EUR/USD

From a technical analysis point of view, the bullish profile of EUR/USD is further strengthening, including two new bullish signals, as the currency pair has crossed its 100 and 200 day moving averages.

À short term, yesterday’s summit at 1.0888 and the threshold of 1.09 combine to form an immediate resistance zone, before the zone of 1.0940-60, then the major psychological threshold of 1.10.

Finally, in case of correction , the zone formed by the 100-day MA (1.0790) and 200-day MA (1.0802) is the first important support for the Euro Dollar.

EUR/USD explodes upwards while US CPI shakes up rate expectations  

Like this post? Please share to your friends:
Leave a Reply