EURUSD: Strong Dollar and U.S. Rate Outlook.
Key Points:
• Dollar Highs: The U.S. dollar approaches seven-week highs, boosted by a strong jobs report that raises expectations for U.S. interest rates.
• Expectation Adjustment: Traders have trimmed the odds of dramatic rate cuts by the Federal Reserve (Fed), lowering the chance of a November cut to 86%.
• Dollar Index: The dollar index currently stands at 102.38, near its previous high of 102.69, highlighting its strength against the euro and other currencies.
• Monetary Policy: Alberto Musalem, president of the St. Louis Fed, supports future rate cuts, but emphasizes the need for caution in monetary policy as economic conditions are assessed.
• Inflation Expectations: Investors are looking ahead to Thursday's inflation report and the minutes of the Fed's September meeting, scheduled for Wednesday.
• Economic Situation: Despite the current slowdown, analysts believe the economy is doing relatively well, with the Fed expected to implement two additional 25 basis point cuts in 2024.
• Global Moves: The euro is near recent lows, trading at $1.09865, reflecting the strength of the dollar in the international market, while the yuan is also weakening against the greenback.
Tuesday's Market Highlights:
1. Ecofin and Eurogroup meetings: monetary strategies and economic forecasts for Europe are expected.
2. Central Bankers in Focus: Statements from ECB and Fed members could offer clues on future monetary policy moves.
3. Volatility in Cryptocurrencies: Bitcoin hovers around $62,000 and Ethereum around $2,400, showing volatile behavior.
4. Commodities: U.S. coffee is trading at $246, while gold futures hover around $2,662.
5. Asian and US movements: Asian indices show mixed signals; the Nikkei is down 1.7%, and Wall Street closed in the red (S&P 500 -0.9%, Nasdaq -1.1%).
6. Comments from John Williams (Fed): Williams suggests that while monetary policy is appropriate, future adjustments may be necessary as the economy evolves.
Technical:
For the past two years EURUSD has been moving in a range between $0.95351 and $1.12632 per euro. On September 30, there has been a third repulsion in the upper zone despite the development in the channel has been slightly bullish. We will have to see if the dollar corrects its price to the middle zone around 1.03195. The RSI is oversold at 37.41% and average volumes are around 381,948k with current trading at 667,080k similar to volumes reflected since September which average 551,196k indicating that there is a constancy of slightly bullish trading volume. The current figure appears to be forming what may be a Shoulder-Head-Shoulder, and if this culminates in this way by turning around at around 1.10558 so, it will confirm that the dollar is regaining its strength.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
• Dollar Highs: The U.S. dollar approaches seven-week highs, boosted by a strong jobs report that raises expectations for U.S. interest rates.
• Expectation Adjustment: Traders have trimmed the odds of dramatic rate cuts by the Federal Reserve (Fed), lowering the chance of a November cut to 86%.
• Dollar Index: The dollar index currently stands at 102.38, near its previous high of 102.69, highlighting its strength against the euro and other currencies.
• Monetary Policy: Alberto Musalem, president of the St. Louis Fed, supports future rate cuts, but emphasizes the need for caution in monetary policy as economic conditions are assessed.
• Inflation Expectations: Investors are looking ahead to Thursday's inflation report and the minutes of the Fed's September meeting, scheduled for Wednesday.
• Economic Situation: Despite the current slowdown, analysts believe the economy is doing relatively well, with the Fed expected to implement two additional 25 basis point cuts in 2024.
• Global Moves: The euro is near recent lows, trading at $1.09865, reflecting the strength of the dollar in the international market, while the yuan is also weakening against the greenback.
Tuesday's Market Highlights:
1. Ecofin and Eurogroup meetings: monetary strategies and economic forecasts for Europe are expected.
2. Central Bankers in Focus: Statements from ECB and Fed members could offer clues on future monetary policy moves.
3. Volatility in Cryptocurrencies: Bitcoin hovers around $62,000 and Ethereum around $2,400, showing volatile behavior.
4. Commodities: U.S. coffee is trading at $246, while gold futures hover around $2,662.
5. Asian and US movements: Asian indices show mixed signals; the Nikkei is down 1.7%, and Wall Street closed in the red (S&P 500 -0.9%, Nasdaq -1.1%).
6. Comments from John Williams (Fed): Williams suggests that while monetary policy is appropriate, future adjustments may be necessary as the economy evolves.
Technical:
For the past two years EURUSD has been moving in a range between $0.95351 and $1.12632 per euro. On September 30, there has been a third repulsion in the upper zone despite the development in the channel has been slightly bullish. We will have to see if the dollar corrects its price to the middle zone around 1.03195. The RSI is oversold at 37.41% and average volumes are around 381,948k with current trading at 667,080k similar to volumes reflected since September which average 551,196k indicating that there is a constancy of slightly bullish trading volume. The current figure appears to be forming what may be a Shoulder-Head-Shoulder, and if this culminates in this way by turning around at around 1.10558 so, it will confirm that the dollar is regaining its strength.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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