cf. [EUR] The Pace Control of the Rate-hike 2022 1106
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The surged euro last week fluctuates in the Bollinger Bands.
The currency pair EUR/USD jumped 4 bigs late week and sidles in the narrow channel as the week begins.
The pair broke through the 20 moving average at once and tries to reach the upper band of the Bollinger Bands in the weekly chart.
The strong upward-moment may support the euro and it will not retreat below the parity.
The investors are able to get the long bias for the euro in the mid term. The euro is able to be bought while its correction.
But it doesn't mean the trend shift, yet. The inflation risk still presses the euro and the Fed still raises the benchmark interest rate. The investors can think the trend shift but aren't recommended to buy the euro.
The surged euro was in the correction Monday.
As the Fed tightened, the greenback recovered the bullish trend. The Fed warned the market against going too far and the U.S. bond yield rebounded. They supported the dollar.
The Dollar Index tracking the dollar against the six peers basket rose 0.43 percent to 106.832.
The hawkish member of the Fed, Christoper Waller spoke the Fed might hike 50 bp on December meeting or later supporting the hawkish stance at the UBS AG Conference in Sydney, Australia. He said the Fed's rate-hike weren't completed yet though the inflation pressure was eased somewhat.
He said, the interest rate would be kept high till the inflation reached the goal, 2 percent.
Waller's comment supported the bond yield and the dollar. The yield of the 10-y Treasury Note rose 7bp to 3.89 percent for a while.
But Lael Brainard, the vice chair of the Fed spoke, the pace of interest-rate hike needed to be eased. The market experts thought, the Fed wouldn't stop the rate hike but would move away from the pace of four consecutive 75 basis points hikes.
The war in Ukraine affects the euro. The possibility of the peace agreement supports the euro, too.
A research header at Monex diagnosed, the traders bought the dollar due to the euro's surge and Fed members' hawkish statement. He added, the currency pair EUR/USD would be still bearish though ECB officials supported the euro's interest rate.
The CME FedWatch anticipate the Fed's rate-hike 50bp in December as 85.4 percent probability. It means that the market expects the big step not the giant step.
Meanwhile Jerome Powell, the chair of the Fed supported the additional rate-hike and it was premature to discuss the rate-hike pause while the press conference after the FOMC.
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