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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] After Non-Farm Payrolls 2020 0905
cf. [EUR] EUR, Trying to Exceed 1.20 2020 0902
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 still holds the Long position of euro in the futures market, CME. It records the loss because euro has retreated for days.
One of the major currency pair, EUR/USD made the head-and-shoulders pattern which shows the downtrend conversion in the one-hour chart, and it continues the downward trend.
We need to watch whether the pair is supported at 1.1760x which was bottom in August at first. The price may retreat to 1.1710 if the price of 1.1760 as the support line is broken. If the 1.1710 is breached, the price is thought to be on the downward trend in mid-term. The long bias to euro will gain the support after the price falls to 1.14x then.
The greenback rose against euro ahead of ECB's monetary meeting on Thursday. The no-deal Brexit risk supported dollar, too. After US Labor Day, dollar rose due to equities in technology sector was in the sharp correction and risk-off trading.
Dollar gained since good Non-Farm Payrolls and lowered unemployment rate, market experts don't think the greenback's rise is the mainstream, though. And Gjallarhorn still has the outlook of weak dollar and strong euro, too.
Because the US economy growth is worried and the benchmark interest rate is anticipated low for a long time. And Fed Chair Jerome Powell spoke the Flexible Average Inflation Targeting which implies Fed will not raise the benchmark interest rate though the inflation hit over 2 percent.
Most market analysts predict that there will be no policy change. They are wary of the possibility of sending a message that seemed concerned about inflation or a strong euro.
A researcher in Captal Economics spoke the strong dollar is tempoary because the global economy will recover from the shock of the novel respiratory coronavirus infection.
There is an analysis that ECB may be more dovish and dollar will be gained.
The experts in Wall Street think it takes long time for the US economy to recover. Analysts predict that the dollar will continue to weaken for at least three months, depending on the Fed's monetary policy outlook.
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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