Solid News

EURUSD Market Update

2/1/2023 1:43 PM

This week, the EUR/USD pair has corrected down to the middle line of the Bollinger Bands around 1.0860 and is currently trying to resume growth.

The euro's position is strengthened by the differing monetary approaches of the European Central Bank (ECB) and the US Fed. The US regulator, whose meeting will end today, may significantly slow down the pace of interest rate hikes from 50.0 basis percentage points to 25.0 basis percentage points, while the ECB on Thursday is likely to maintain the previous adjustment step of 50.0 basis percentage points. Investors will be more interested in hints about the duration of the tightening cycle of monetary policy in the USA and the EU, which may also differ significantly. Experts believe that, despite the current slowdown in price growth, the US labor market is still too strong and retains the prerequisites for inflationary pressure, so the US Fed may go for two more moderate interest rate hikes (in March and May) before bringing it to a peak level of 5.00-5.25%. Due to high core inflation in the eurozone, the ECB may adjust the value at the same pace during the first half of this year and even further.  In general, the pace of monetary policy tightening and its duration may be more significant for the ECB than for the US Fed, which in the long term will provide greater support for the euro.

We also note that a number of important economic data is expected to be published today. So, in the eurozone, January statistics on consumer prices will be released, which will probably reflect a reduction in the index from 9.2% to 9.0%, and in the USA – on employment from Automatic Data Processing (APD), and, according to forecasts, the indicator will decrease from 235.0K to 178.0K. These results are unlikely to have a serious impact on the market, since they will no longer be taken into account by regulators when making the next decisions.  

Technically, the price is close to 1.0930 (Fibo retracement 50.0%), a breakout of which will give the prospect of further growth to the levels of 1.1100 and 1.1230 (Fibo retracement 61.8%, Murray level [6/8] for W1). The key for the "bears" is the level of 1.0742 (Murray level [8/8]), below the middle line of the Bollinger Bands, when it is broken down, a decline will be possible to the area of 1.0620 (Murray level [7/8], Fibo retracement 38.2%) and 1.0498 (Murray level [6/8]), however, this movement option is seen less likely, since technical indicators point out the continuation of the upward trend: the Bollinger Bands are directed upwards, the MACD histogram is stable in the positive zone, the Stochastic also attempts an upward reversal.

Resistance levels: 1.0930, 1.1100, 1.1200. | Support levels: 1.0742, 1.0620, 1.0498.

Find Us
Registered Address : Bonovo Road – Fomboni Island of Mohéli – Comoros Union
Sofia, PO Box 1407,14 Flip Kutev Str. Floor 2, Industrial area Hladilnika, Bulgaria
Call Us
+35 924 928 392

Risk Warnings
Solid ECN Securities LLC offers trading on Foreign Exchange (‘Forex’ or ‘FX’) and Contracts for Difference (‘CFDs’), which are complex financial products that are traded on margin. They carry a high level of risk since leverage can work both to your advantage and disadvantage. As a result, these products may not be suitable for all investors, as loss of all invested capital may occur. You should not risk more than you are prepared to lose. Before deciding to trade, you need to ensure that you understand the risks involved and consider your investment objectives and level of experience. Seek independent advice, if necessary.
Solid ECN Securities LLC does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of a CFD. Solid ECN Securities LLC is not a financial advisor and all services are provided on an execution-only basis. This communication is not an offer or solicitation to enter into a transaction and shall not be construed as such.
This website is not directed at any jurisdiction and is not intended for any use that would be contrary to local law or regulation.
By using you agree to use our cookies to enhance your experience.
Solid ECN Securities LLC is authorized and regulated by the Comoros Union with reference number HY00623411.
Disclaimer 1: The information provided on this site is not intended for residents of any country or jurisdiction where its distribution or use would violate local laws or regulations.
Disclaimer 2: Solid ECN Securities LLC and it affiliates does not provide services to residents of the USA, Japan, Canada, Australia, the Democratic Republic of Korea, European Union, United Kingdom, Iran, Syria, Sudan and Cuba.
Copyright All Right Reserved 2023