Greenback at 20-years high, waiting green light from Fed.
“The market is over-confident that inflation has peaked.”
Greenback hovers near 20-years peak as investors brace themselves for yet another policy meeting from the Federal Reserve. According to data, futures show expectations for up to 200 basis point rate hike by September, supplementing extensive support for US Treasury to remain at its peak. Divergence in forward guidance among other central bank place Fed at the forefront due to “stickiness” of US inflation. Investors speculate that Fed may initiate a more aggressive approach soon to evade probable event of stagflation.
Quick recap on EURUSD
The pair pared its prior gains substantially, subjected to bearish pressure from the top level of descending channel.
EURUSD Weekly Technical Analysis
In weekly perspective, the pair is setting stage for further downside as prior recovery remained short-lived.
EURUSD Daily Technical Analysis
In daily perspective, the pair requires a close below 1.0381 to extend its downside bias. A tough call is up ahead as bulls may try to defend this level, an occurrence we observed during mid of May.
ORDER: SELL STOP
STOP LOSS: 1.0440
Target 1: 1.0250
Target 2: 1.0200
ZFX Analyst’s Comment
Although the pair signaled possible downside ahead, we would still require a confirmatory close below 1.0381. Such momentum may occur soon after Federal Reserve delivers their verdict on the latest policy outlook this Thursday.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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