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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Before Powell's Speech 2020 0827
cf. [EUR] Moderate Euro before Powell's Speech 2020 0826
cf. [EUR] Rebounding Euro 2020 0821
Gjallarhorn holds the Long position of euro in the futures market, CME. It records the loss because it was bought at the local peak. Euro needs to exceed 1.20 in order for Gjallahorn's losses to turn into profit.
The currency pair EUR/USD retreated after the US ISM Manufacturing PMI on Tuesday. It recorded 56.0 better than market's expectation. It supported the recovering US economy and the investors bought the greenback.
The pair tries to form the head-and-shoulders pattern and the price could drop to 1.1820, 120 exponential moving average of four-hour chart. The price fluctuates in the channel in four-hour chart and daily chart, and it seems to accumulate the momentum up or down.
Gjallarhorn expects euro will rise over 1.20 and it saves the momentum of exceeding it.
The better-than-expected ISM Manufacturing PMI supported the falling greenback on Tuesday. Before the release-it, euro recorded 1.20, the highest peak in 52 weeks. The speech of Jerome Powell, Fed Chair at Jackson Hole Symposium made dollar plunge. He confirmed 'the Average Inflation Targeting' which admit the 2 percent over of inflation and there will not be the hike of the benchmark interest rate in long term.
But good record in the US manufacturing sector turned greenback to upward.
Fed Chair, Powell denied the possible negative benchmark interest rate in May.
It was 56.0 and the market consensus was 50.0. It was high since November 2018.
Societe General has diagnosed that the euro's long position against the dollar was too much, and it has burdened.
Though US dollar rose on Tuesday, the downward trend of greenback is still valid, Gjallarhorn thinks.
Netherlands's bank ING forecasted euro's rise to 1.20 in one month. After this correction euro keeps upward rise due to the fundamental momentum.
Vice-Fed Chair, Richard H. Clarida spoke the natural rate of interest had gradually dropped since 2012 and began to reconsider the monetary-policy frame. And he hinted FOMC might use Yield Curve Control(YCC) if needed.
Meanwhile German government adjusted German economy growth up to minus 5.8 percent, which was -6.3 percent when released in April.
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