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| EUR/USD four-hour chart, source:FXDD.com |
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The currency pair EUR/USD surged for a long time. It rose more one big last night.
The pair has formed the head-and-shoulders pattern which shows the bearish market in the four-hour chart. It rebounded after the sidling, and it reached the 120 exponential moving average moving along the upper band of the Bollinger Bands in the four-hour chart.
The euro fell to 0.96s and it was supported on the price band. The downward trend was completed as the euro was supported the 0.96s in the short term. It sank below the support band for a moment after the risen release of CPI but it succeeded to recover the price.
The euro has risen to the 20 moving average, and it has both possibility of rise and fall in the daily chart.
But the main trend is still bearish. The weekly chart and the monthly chart still show the explicit downward trend of the EUR/USD and the bullish greenback.
Though the euro rises against the dollar, it may retreat below the parity.
It is still available to keep the short bias to the euro and buy the dollar.
As the U.S. CPI showed the unchanged inflation pressure, the dollar rose. But it lost the momentum against the major peers shortly. The risk of the economy indices was already reflected and the risk-on sentiment dropped the greenback, the analysts thought.
And the Dollar Index tracking the dollar against the currency basket of the six peers fell 0.70 percent to 112.491.
The U.S. CPI in September was 8.2-percent rise year-on-year. It is higher than the expectation 8.1 percent rise. The core CPI was 6.6 percent, higher than the expectation, too.
The CPI stimulated the investor's concern about the hawkish Fed stance. The FOMC meeting minutes released the prior day showed the hawkish members' opinion.
But the risk-averse sentiment was already reflected before the release of the meeting minutes and the CPI, some experts analysed, too. The Treasury Note yield just rose 6 bp to 3.96 percent, the media reported.
The euro rose against the dollar as the risk-on sentiment was recovered. But it has moved below the parity. It was reported, the hawkish ECB stance doesn't overwhelm the U.S. Fed's.
The market experts expect the Fed's continuous giant step in November, too. Shima Shah, strategist at Principal Asset Management said, there was no one in the market who believed the Fed would hike the benchmark interest rate below 75 bp after the CPI. He added, the benchmark rate might be hiked 75 bp in December, too.
The Fed members have showed the hawkish stance. Jerome Powell, Fed Chair has confirmed the rate hike, and Christopher Waller, the Fed member has supported the significant hike in the benchmark interest rate.
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