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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Rebounding Euro 2022 0621
cf. [EUR] Giant Step and Retreating Dollar 2022 0617
The reports from Gjallarhorn are produced by a trader, not by an analyst. The reports are provided to the investors showing the trader's view on the market.
Gjallarhorn doesn't have any position in CME, now.
The currency pair EUR/USD plunged to the historical parity last week. It even sank below 1.0 for a while.
The EUR/USD rebounded after the touch 1.0 and it is 1.01xx in the early week.
The rebounding euro is expected to rise to the 120 exponential moving average 1.025x in the four-hour chart or 1.029x, 20 moving average in the daily chart at least.
But the bias on the euro is short. The benchmark hike on the dollar is anticipated and it support the dollar's rally.
The European Central Bank, ECB is expected to hike the benchmark rate in the week, too. The traders guess the basic step, 0.25 percent. It isn't powerful than dollar's. And the global stagflation risk calls the risk-averse sentiment.
After the euro's parity to the dollar last week, the euro rebounded. It is hard to think the euro plunges below 1.0 against the greenback at once and the traders can guess the euro rise again on the parity.
The market participants guessed the Fed's jumbo step, 1.0 percent rate hike but they expect the 75 basis point hike, the giant step again. It supported the risk-on sentiment and helped the euro.
The dollar index tracking the greenback against the currencies' basket dropped 56bp to 107.421.
The hawkish Fed member, Christopher J. Waller has supported the benchmark interest rate hike, but he doesn't agree the jumbo step, 100bp hike.
Another hawkish member, James Bullard, President of the Federal Reserve Bank of St. Louis hinted he supported 75bp hike while the interview with Japanese economy daily, Nihon Keizai Shinbun. He said, the current pace of the interest rate hike was valid.
The customer price index in June released last Wednesday rose 9.1 percent and it made the traders expect 100bp hike.
The Federal Reserve holds the FOMC next Tuesday and Wednesday. It is expected the FOMC will hike the Federal Fund Rate and release the monetary policy.
The speculative dealers still bet on the strong dollar. The long positions on the greenback hit high in the seven weeks.
An expert on the bond said, the Fed seemed to support 75bp than 100bp.
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