[EUR] Euro in Complicated Crisis 2020 0316

EUR/USD four-hour chart, source:FXDD.com

cf. [EUR] Before FOMC Meeings 2020 0315
cf. [EUR] Correction of Euro 2020 0311
cf. [EUR] Correction or Downward trend 2020 0305
cf. [EUR] Recovering Euro 2020 0302
cf. [EUR] Between the technical rebound and upward trend 2020 0226

Euro surges on Monday. US Fed Chair Jerome Powell announced Federal Funds Rate was cut one percent point and it raised euro against dollar.

Beginning of Europe session, euro broke through 20 moving average in four-hour chart and kept its rising momentum. But there are 120 Exponential Moving Average in one-hour chart and 20 SMA in four-hour chart simultaneously as the resistance line. It is inevitable to be in the correction.

And the price of currency pair EUR/USD tries to build the price-decline, Head-and-Shoulders pattern in four-hour chart. We need to watch the chart rather than to buy euro. Gjallarhorn recommends to buy euro after confirming rebound of euro. Euro could retreat to 1.099 and decline to 1.0799 in the worst case.

At least the trader should check whether euro succeeds at 1.10~1.099.

Federal Reserve cut the Federal Funds Rate one percent point to near zero percent and began the Quantitative Easing Program simultaneously on Sunday. FOMC meetings are planned to be held on Tuesday and Wednesday, and market participants predicted Fed would cut the benchmark rate on this day.

The economy daily Wall Street Journal reported, Fed has never cut the benchmark interest rate two times between regular FOMC meetings since 1994. It means Fed thinks the economic crisis due to the pandemic of CoVid-19 outbreak seriously.

WSJ reported, Jerome Powell decided decided to hold the emergency meeting ahead of the weekend on last Thursday. The officials held a video conference and decided to cut the rate by 1 percent point to meet market expectations. In 5 years, the United States has decided not only to open the era of zero interest rates again, but also to cut interest rates in two weeks.

Fed Chair Powell announced the rate cut before Asian stock market opening. The scheduled FOMC meeting on Tuesday and Wednesday is replaced by the emergency announcement of the day.

And South Korea's central bank BOK also cut the benchmark rate 0.5 percent point to 0.75 percent in a temporary conference on Monday. The meeting of BOK was not planned on the day.

BOJ, Japanese central bank held the meeting earlier than schedule and decided to increase double to purchase ETF.

Though these efforts, stock markets around the world move down. Asian market declined on Monday. Japanese NIKKEI225 declined 2.46 percent and Topix 2.01 percent down. Chinese Hang Seng Index was down 4.03 percent,  Korean KOSPI 3.19 percent down, too.

Central banks around world cut their key interest rates and begin their QE programs. But we should know the pandemic is controlled by doctors and vaccine researchers not by bankers and economists.

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