EUR/USD FED day, what to expect ahead?
In this post I will mention what to expect in the price action according to fundamentals and FED decisions ahead?
FUNDAMENTAL ECONOMIC OUTLOOK
1- U.S. retail sales still, the total value of sales was $620 billion, well above the almost $520 billion in FEB. before the pandemic.
2- Prices paid to U.S. producers rose last month thanks to elevated material costs and shortages as well as shipping bottlenecks and rising labor expenses (Positive to USD if the FED takes any inflation reduction action)
3- EU commission president will travel to Portugal and Spain as EU approves the first batch of spending plans under the bloc's pandemic recovery fund, the first sale that has started will see the bloc issue a record of 20 billion euros, double what was initially indicated.
4- U.S. pandemic death toll topped 600,000 this week, indicated that the fight is far from over.
what to expect in the price action according to fundamentals and FED decisions ahead?
- According to the economic outlook, the recovery in the U.S. is well faster than in EU, and the only reason the downtrend is not gaining the full strength is the high inflation and the worries that the FED wouldn't take any actions towards this problem and if this happens all the upbeat data wouldn't have that effect as all in all the inflation would erase all the progress and push the U.S. into economic disruption. On the other hand there are some news that the EU is having the power to appreciate the EUR through the sales of the bonds that is making records and having the investors attention.
- THERE ARE 2 scenarios expected accordingly -
1- If the FED takes any action towards tapering ( HIGHLY EXPECTED ) or hike interest rates (LOW EXPECTED) or do both, the USD will gain strength and the price could test 1.1950, PRICE RANGE (1.1950-1.2150), and from here would be a good chance for buyers (SWING HIGH).
2- If the FED does not take any action (NO TAPER, HOLD INTEREST RATE NEAR ZERO) the price will appreciate and probably break above 1.2350, PRICE RANGE (1.2050-1.2350).
- FINALLY I WOULD SAY THAT THE FIRST SCENARIO IS THE MOST LIKELY TO HAPPEN ACCORDING TO ALL THE FUNDAMENTAL AND EXPECTATION SOURCES, AND ACCORDINGLY THE PRICE IS VERY LIKELY TO DEPRECIATE AND BREAK BELOW 1.2050 TARGETING 1.2000 WITH A MAXIMUM TARGET OF 1.1950.
FUNDAMENTAL ECONOMIC OUTLOOK
1- U.S. retail sales still, the total value of sales was $620 billion, well above the almost $520 billion in FEB. before the pandemic.
2- Prices paid to U.S. producers rose last month thanks to elevated material costs and shortages as well as shipping bottlenecks and rising labor expenses (Positive to USD if the FED takes any inflation reduction action)
3- EU commission president will travel to Portugal and Spain as EU approves the first batch of spending plans under the bloc's pandemic recovery fund, the first sale that has started will see the bloc issue a record of 20 billion euros, double what was initially indicated.
4- U.S. pandemic death toll topped 600,000 this week, indicated that the fight is far from over.
what to expect in the price action according to fundamentals and FED decisions ahead?
- According to the economic outlook, the recovery in the U.S. is well faster than in EU, and the only reason the downtrend is not gaining the full strength is the high inflation and the worries that the FED wouldn't take any actions towards this problem and if this happens all the upbeat data wouldn't have that effect as all in all the inflation would erase all the progress and push the U.S. into economic disruption. On the other hand there are some news that the EU is having the power to appreciate the EUR through the sales of the bonds that is making records and having the investors attention.
- THERE ARE 2 scenarios expected accordingly -
1- If the FED takes any action towards tapering ( HIGHLY EXPECTED ) or hike interest rates (LOW EXPECTED) or do both, the USD will gain strength and the price could test 1.1950, PRICE RANGE (1.1950-1.2150), and from here would be a good chance for buyers (SWING HIGH).
2- If the FED does not take any action (NO TAPER, HOLD INTEREST RATE NEAR ZERO) the price will appreciate and probably break above 1.2350, PRICE RANGE (1.2050-1.2350).
- FINALLY I WOULD SAY THAT THE FIRST SCENARIO IS THE MOST LIKELY TO HAPPEN ACCORDING TO ALL THE FUNDAMENTAL AND EXPECTATION SOURCES, AND ACCORDINGLY THE PRICE IS VERY LIKELY TO DEPRECIATE AND BREAK BELOW 1.2050 TARGETING 1.2000 WITH A MAXIMUM TARGET OF 1.1950.
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