Sunday, 28 August 2016

[EUR] Fed Raises Its Rate?

EUR/USD 4-hour chart, source: forexfactory.com

EUR/USD weekly chart, source: forexfactory.com


Last week, currency pair EUR/USD faced the adjustment. Its price repeated the rise and fall and plunged end of the last week.



Before the technical analysis, we need to watch the news from Fed chair, Janet Yellen. She spoke at the Fed's Jackson Hole symposium and implied the raising of Fed fund rate. She has the optimistic view on U.S. economy and it leads the hike of the interest rate.



Fischer, vice-chair of Fed supported the hawkish position, too. He said the rate may hike in next month and the hike of the rate may be done more.



Chicago Merchant Exchange, CME's Fedwatch forecasted the probability of rate's hike in this year is forty-two percent, economy news agency bloomberg reported. Goldman Sachs reported the possibility in September is forty percent and eighty percent in this year.



Unlike another central banks such as bank of Japan, bank of England and Europe Central Bank which continue the quantity ease, Federal Reserve Bank carries out the exit plan.



But some economists worry the hike of the rate beats the emerging markets in Asia. After the rate's hike in U.S., economy crisis followed, they told. The economy crisis in Asia, 1997 and the global finance crisis in 2008 occurred after Fed's action, they said.



The chart of this currency pair doesn't explicit signals to buy long position. In weekly chart the price didn't break through price band of 1.15 yet, four-hour chart plunged below the short-term upward trend line. The chart seems to say the short position. Non-farm payroll is announced on Friday, the optimistic index stimulates the surge of greenback.

http://cafe.naver.com/gjallarhorn/55

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