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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Rising Euro Ahead of FOMC 2020 0915
Gjallarhorn holds the Long position of euro in the futures market, CME. It still records the loss.
As the week begins, the currency pair EUR/USD has plunged. The pair which rose mildly in Asian session turned its direction downward.
But euro retreated against dollar, it still fluctuates in flat Bollinger Bands in four-hour chart and daily chart. It is not valid to get the short bias of euro, yet.
One of the major currency pair EUR/USD has dropped to fresh 6-week lows around 1.1720 earlier on Tuesday. The falling currency pair retreated to 1.1719 in this morning(GMT).
It tries to rebound on the adjusted support line in the four-hour chart, and it takes time to confirm its trend, upward or downward. We need to watch whether the price rises to 1.1824 which is 20 Moving Average in the four-hour chart. If it succeeds to exceed 20 MA, it gives hint of rising euro.
Due to concerns about the re-proliferation of the novel coronavirus infection, risk-off sentiment made investors to buy safe-haven asset such as dollar in the week. And the euro fell against dollar.
The speech of Christine Lagarde, president of European Central Bank which ECB watches the strong euro carefully, also affected the currency pair and weak euro.
ECB has worried about the recent euro's rising. Because the strong euro burdens the economy recovery in Eurozone. And it may restrain the rising height of euro.
EUR/USD dropped and recorded fresh monthly lows near 1.1720 earlier in the session, resuming the post-FOMC downtrend. Despite the move, the pair’s outlook remains positive and bouts of weakness are so far deemed as short-lived and look contained.
Investors are expected to closely follow the first testimony by Fed Chair Jerome Powell on the Fed’s response to the pandemic. The dollar will, therefore, be under the microscope practically during the whole week.”
Meanwhile the experts in Wall Street think it may take long time for the US economy to recover. Analysts predict that the dollar will continue to weaken for at least three months.
And Vice-Fed Chair, Richard H. Clarida has spoken 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.
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