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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Between the technical rebound and upward trend 2020 0226
cf. [EUR] Expecting Euro Recovery 2020 0223
cf. [EUR] 기술적 반등, 유효한 매도적 관점 2020 0221
cf. [EUR] Downward Trend Euro 2020 0215
One of the major currency, EUR/USD has begun to rebound after the long and deep fall. Euro recorded the multi-year low since April 2017, but began to recover the price since February 20.
It broke through 1.10 and passed the edge of two trend line which was broken by falling euro.
The price of EUR/USD is 1.1111 as of 12:50(UTC) and it is higher than previous peak on January 31 in four-hour chart and exceeds upper band of Bollinger Bands in the daily chart.
Surging euro gives the market participants the expectation of its reaching 1.12, but it isn't uncertain and difficult process.
Forex market moves with recursion of rising and falling. It looks like vibrating unlike equities movement. As euro has fallen repeating up and down, it will repeat up and down then its trend will be determined after the fluctuation in the chart. We should not be optimistic easily.
Final Manufacturing PMI in euro zone in February was released on Monday and was 49.2 better than expected 49.1, and it supported euro.
Forex market in 1st quart was driven by not its own momentum but external facts, the pandemic respiratory virus. As the greenback did in last year, it surged early the year and euro sank to multi-years low.
As the coronavirus outbreak threatens the global economy, the participants expect central banks' action. They especially expect the Federal Reserve to cut the key interest rate.
To overcome the outbreak of nCoViD-19, coronavirus, governors of central banks of major economy entities would cut the benchmark rate, respectively, Wall Street expects.
Market Watch reported, major central banks will cut the key interest rate soon, quoting blog of Bill Nelson, chief economist of BPI. The rate cut may reach 0.50 percent point at least.
According to Nelson's blog, governors would do on Wednesday.
And Goldman Sachs predicts Fed will cut Federal Funds Rate, benchmark interest rate earlier March 16~17, in which Federal Open Market Committee(FOMC) is held.
Recent interest rate of Fed is higher than ECB's. If two central banks cut their interest rate simultaneously, Fed's action is more powerful and it support euro rising.
Though Gjallarhorn says the careful prospect to Forex but it keeps long position of Euro FX in CME. The plunge in the euro makes big loss.
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