-1701770647.png)
USD Recovery Continues
The US Dollar has seen better demand over recent sessions with the Dollar Index posting a small recovery for now. With a slew of data to come this week, starting with ISM data later today and culminating with jobs data on Friday, there is plenty of volatility risk to monitor this week. For now, it seems the rally in USD is mainly being fuelled by weakness in EUR on the back of dovish ECB comments yesterday.
Schnabel Shifts on Rates
ECB’s Schnabel yesterday signalled that further tightening was off the table on the back of recent inflation data and eurozone growth data. Additionally, Schnabel said that the ECB should not look to keep rates steady through 2024, suggesting support for cuts. Schnabel’s comments were particularly market moving given that just a month ago she was heard voicing support for further tightening if needed. The market is seemingly taking these comments as a sign of a deeper shift at the ECB.
US Jobs Data Due
Looking ahead, the main focus this week will of course be on the latest US jobs reports on Friday. Given the dovish shift in terms of the market’s Fed-expectations, signs of further weakness will be firmly bearish for USD. However, if we see any fresh upside, particularly in wage-growth, this might allow the current USD recovery room to continue near-term, putting further pressure on EURUSD.
Technical Views
EURUSD
The failure at the retest of the broken bull trend line has seen EURUSD reversing sharply lower. Price is now back below the 1.0937 level and testing support at the 1.0785 level. This is a key pivot for the market with a break lower here opening the way for a much deeper move towards 1.0515 next.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.