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| The EUR/USD four-hour chart, source:FXDD.com |
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 has no position in CME and just watch the market now.
The currency pair EUR/USD formed the Head-and-Shoulders pattern and was supported on around 0.9737. After forming the pattern, the currency pair rebounded and reached the upper band of the Bollinger Bands in the four-hour chart.
It is confirmed that the euro is supported on some 0.97s though it fluctuated under the parity.
The main trend is still bearish, the weekly chart of the euro hints the trend-shift though.
The EUR/USD weekly chart shows euro has become to rise and tried to shift the bullish trend.
It isn't available to comment the bullish but the euro may not sink more.
Gjallarhorn think the investors need to watch the weekly chart, too. The 20 moving average is explicit downward and the EUR/USD is still below the moving average, but it is expected euro's rise in some weeks.
The European Central Bank hiked the benchmark interest rate, the Main Refinancing Rate on October 27. It jumped 75bp to 2.00 percent.
The Dollar Index which tracks the greenback against its six peers basket rose 0.1 percent this week while its retreat 2.03 percent to 110.769 Friday.
The Dollar Index used to retreat to 110.688.
The Non-Farm Payrolls in October increased 261 thousands better than experts' expectation 205 thousand increase. It called the risk-on sentiment dropping the greenback. And the currency pair EUR/USD rose 2.24 percent to 0.99610.
The unemployment rate in October released on Friday was 3.7 percent worse than the previous 3.5 percent and the expectation 3.5 percent.
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.
Though the hawkish stance, it was in the market's expectation, and it didn't beat the Forex market.
The Fed member Neel Tushar Kashkari anticipated the benchmark interest rate would be hiked to 4.9 percent more. And he spoke the job market was strong. He is one of the hawkish members in Fed.
The Federal Reserve is still expected to keep the hike of the Federal Funds Rate, but some board members signal that the pace of the quantitative tightening is controlled,
Thomas Barkin, president and CEO of the Federal Reserve Bank of Richmond spoke the Fed shifted the step while the interview with the U.S. CNBC. He said, the Fed would brake sometimes while the benchmark-rate hike in the another step.
Barkin said the Fed's policy rate, which is currently between 3.75 percent and 4.00 percent, could eventually reach more than 5 percent.
Due to the risk-on, the euro rebounded on Friday. But the European Central Bank president, Chiristine Lagarde spoke the ECB wouldn't copy the Fed's actions though the ECB's watch to the Fed. Lagarde's comments devaluated the euro.
The U.S. daily New York Times reported the U.S. yield gave the clues of the Fed's interest-rate goal on Wednesday. The U.S. bond market provide the explicit signals of the interest rate and the economy outlook by the yield. Ahead of the Fed's benchmark rate hike, the yield in the bond market began to rise.
The 2-year bond yield recorded 4.6301 percent on Wednesday. The 10-yr Treasury Note yield already rose to some 1.5 percent last December.
And the current bond yield expects the recession.
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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