Last week the price of EURUSD ranged between 1.02700 and 1.01550 key levels, forming a 100+ PIPs consolidation area. EURUSD closed a 0.9% weekly gain, the most since May after the ECB raised the three key interest rates by a more than expected 50 basis points.
Moreover, worries about gas supplies eased for now as gas flows through Nord Stream 1 resumed. Soaring natural gas prices amid uncertain energy supply from Russia are weighing on the GDP growth making it more difficult for the ECB to tighten the monetary policy.
CPI figures were released two weeks ago higher than forecast, indicating that inflation is still on the rise even with the constant rate hikes of the Federal Reserve. The U.S. CPI is at 9.1%, while interest rates are at 1.75%, the gap remains huge, and inflation is not slowing down anytime soon. The DXY pushed higher due to recession fears and investors pricing in a 100 BPS rate hike.
That said, we're heading into a new week with Wednesday's FED Interest Rate Decision and U.S. Federal Open Market Committee (FOMC) Statement. Suppose the FED hikes interest rates by 100 BPS, which is already priced into the markets. In that case, we will see short-term bullish momentum on EURUSD before bearish continuation with the higher timeframe trend. However, if the FED surprises investors by raising interest rates more than 100 BPS, then we will see USD strength, thus EURUSD bearish momentum.
Please consider that we're discussing weekly trends, not overall macro analysis. EURUSD will remain bearish on the macro scale due to the aggressiveness of the Federal Reserve's monetary and fiscal policies.
Moreover, worries about gas supplies eased for now as gas flows through Nord Stream 1 resumed. Soaring natural gas prices amid uncertain energy supply from Russia are weighing on the GDP growth making it more difficult for the ECB to tighten the monetary policy.
CPI figures were released two weeks ago higher than forecast, indicating that inflation is still on the rise even with the constant rate hikes of the Federal Reserve. The U.S. CPI is at 9.1%, while interest rates are at 1.75%, the gap remains huge, and inflation is not slowing down anytime soon. The DXY pushed higher due to recession fears and investors pricing in a 100 BPS rate hike.
That said, we're heading into a new week with Wednesday's FED Interest Rate Decision and U.S. Federal Open Market Committee (FOMC) Statement. Suppose the FED hikes interest rates by 100 BPS, which is already priced into the markets. In that case, we will see short-term bullish momentum on EURUSD before bearish continuation with the higher timeframe trend. However, if the FED surprises investors by raising interest rates more than 100 BPS, then we will see USD strength, thus EURUSD bearish momentum.
Please consider that we're discussing weekly trends, not overall macro analysis. EURUSD will remain bearish on the macro scale due to the aggressiveness of the Federal Reserve's monetary and fiscal policies.