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euro stalls below $1.1460 ahead of US CPI

TOPICS MENTIONED IN THIS EUR/USD PAIR ANALYSIS

  • Investors await the consumer price index
  • EUR/USD: the euro is testing the resistance at $1.1460

Investors await the consumer price index

At the beginning of the week, markets continue to digest US jobs report (NFP) of januarymarked by job creations well above expectations and an increase in salaries.

At the end of the employment report,everything suggests that the Federal Reserve is on track for a rate hike at its March 15-16 meeting. Most of operators expect an increase of 25 basis points or even 50 basis points. In this context, lare investors will turn to the monthly consumer price figures in the United States on Thursday, which should fuel the debate on the pace of monetary tightening to come.

Last week, the euro benefited from the change in message from the European Central Bank, which in turn expressed concern about the strength of inflation.The pace of inflation pushed Klaas Knot, a member of the ECB Governing Council, to say over the weekend that he expects the first ECB interest rate hike as early as October.

Christine Lagarde also said on Monday during a virtual hearing before the Committee on Economic and Monetary Affairs of the European Parliament that : ” inflation is likely to remain high in the near term, fueled mainly by energy prices ».

EUR/USD: the euro is testing the resistance at $1.1460

Graphically, the euro paused on Monday after a meteoric rise in just a few sessions. After such a bullish rally, it is legitimate for the pair to catch its breath a bit.

Technically, the construction of a range between $1.1140 and $1.1460 is starting to take shape. The prices stumble on the upper limit which prevents the market from accelerating towards the next resistances. However, the key threshold to cross to trigger a powerful bullish movement is located at $1.1530. A break of this level would be considered a signal of strength, which would allow the buying flow to continue its course towards $1.1620 and then $1.1710.

On the other hand, if the’EUR/USD runs out of fuel and finds itself unable to cross la zone of $1.1460 – $1.1530, then the bearish momentum is likely to regain its rights. Of course, this would pave the way for a consolidation phase and the market would fall back to the support levels inside the range.

EUR/USD CHART IN DATA JOURNALSISRES

Twitter @Joris Zanna

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