- Fed officials have returned to their previous hawkish sentiments.
- Some Fed officials are starting to consider a 75 bps rate hike.
- Investors are waiting to hear from ECB member Frank Elderson later today.
Today’s EUR/USD forecast is bearish as the US dollar surges on more hawkish statements from Fed officials. The dollar index, which gauges the dollar’s value against those of six other currencies, had somewhat increased overnight but was unchanged in early trade at 106.39. This week, it increased by about 0.5 percent, reversing the two-week trend.
–Are you interested to learn more about low spread forex brokers? Check our detailed guide-
“The dollar weakened last week after the (policy-setting) Federal Open Market Committee meeting because the market wanted to believe that the Fed was pivoting in a dovish manner because of slowing growth,” said Sim Moh Siong, currency strategist at the Bank of Singapore.
“This week, there are many more FOMC speakers pushing back against this idea, all singing the same tune: ‘we are not done, and you should expect more rate hikes,'” he added.
San Francisco Fed President Mary Daly said that a 75-basis-point hike might be more reasonable if inflation continues to rise unabatedly and the labor market shows no indications of slowing down. However, she also kept a 50 basis-point rate hike in mind.
EUR/USD key events today
The statistical information that policymakers consider for determining interest rates is published in the Economic Bulletin of the European Central Bank (ECB). The report, set to come out later today, also thoroughly examines the present and upcoming state of the economy from the bank’s viewpoint.
Investors expect a speech from Frank Elderson, a European Central Bank’s executive board member and vice-chair of the Supervisory Board. His statements frequently include clues about the potential future course of monetary policy.
EUR/USD technical forecast: Bears heading for range support at 1.01091
Looking at the 4-hour chart, we see the price trading within a range with resistance at 1.02887 and support at 1.01091. We also see that the price has moved steeply from the range resistance toward the range support with bears in control.
–Are you interested to learn more about forex bonuses? Check our detailed guide-
The price is trading below the 30-SMA, and the RSI is trading below 50, favoring bearish momentum. If this movement continues, we might see the price retesting and possibly breaking below the 1.02887 resistance level.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
Saqib Iqbal
