No problem — we will send you a password reset link to your registered email
Still no joy? Contact us
Thanks — all done!
Please check your inbox and follow
the instructions
Still no joy? Contact us
... and now a few questions so we can create your bespoke configuration
(we will email it to you)
You can answer the questionnaire later, or choose the default TradeRadius profile if you prefer
You Are Subscribed To TradeRadius News!
Link is expired. Please try again.
Your comment has been sent for moderation.
You are skipping the configuration step. It means we will apply default Quant Model configuration to your account. You will be able to answer the questions later. If you would like to get personalized configuration, please, answer on the questionnaire
live commentary Post
Back to Live CommentaryEUR/USD weakens after Lagarde comments, ahead of Fed decision
By TradeRadius | Wed, 20 Mar 2024 12:25:53 UTC
EUR/USD declines back to the lower 1.0800s on Wednesday, after several European Central Bank (ECB) speakers, including the President of the ECB Christine Lagarde and the Bank of Ireland Governor and ECB governing council member Gabriel Markhlouf cite lower inflation.
ECB's Lagarde highlighted lower wage inflation, something which at previous meetings she said the ECB would be watching closely before deciding future ECB policy moves.
"Average wage growth in 2024 for all existing wage contracts fell from 4.4% at the time of our January Governing Council meeting to 4.2% at the time of our meeting in March," said Lagarde at the ECB and its Watchers" conference on Wednesday.
Lower inflation increase the probability that the ECB will opt to cut interest rates which would be a negative move for the Euro (EUR) and the EUR/USD pair.
Interest rates, set by central banks, are a key driver of foreign exchange markets. Lower interest rates tend to depreciate a currency by attracting less foreign capital inflows and vice versa for higher interest rates.
EUR/USD could be impacted if Fed changes forecasts
The Federal Reserve is scheduled to complete its March policy meeting at 18:00 GMT on Wednesday and while it is not expected to alter interest rates there is a chance it could revise its quarterly forecasts and accompanying statement. This could change the outlook for interest rates and therefore the US Dollar (USD) valuation.
EUR/USD could see volatility as speculation is mounting that the Federal Reserve will revise its economic forecasts in the Summary of Economic Projections (SEP), and the “dot plot”, which reflects the Board of Governors of the Fed’s consensus of the future path of rates.
In the previous SEP, officials forecast three 25 basis points (0.25%) rate cuts in 2024 but some analysts now think there is a material risk that this could be revised down to two 25 bps cuts to reflect inflationary pressures remaining elevated.
“The summary of economic projections will be updated and contains hawkish risks in our assessment with the committee potentially projecting fewer cuts in 2024,” says David Doyle, head of economics at Macquarie, in a note about the Fed meeting.
ECB speakers take the stand
In Europe, a similar debate is going on about when to begin cutting interest rates, with two camps emerging – those who favor waiting until the European Central Bank’s June meeting to decide (the official camp) and a smaller mutineering group who want to keep alive the possibility of an early spring rate cut.
On Tuesday, Vice-President of the European Central Bank (ECB), Luis de Guindos, maintained allegiance with the June camp after he said “we have to wait,” because “services inflation” remains too high.
Wednesday sees a host of ECB talking heads appear in public who could provide further intelligence on which way the ECB is swinging. This may also impact EUR/USD volatility.
The ECB President Christine Lagarde, ECB Chief Economist Philip Lane and ECB's Gabriel Markhlouf have all already spoken at the "ECB and its Watchers" conference. ECB Executive Board member Isabel Schnabel is also set to speak at 13:45 GMT.
Later, the President of the Bundesbank, Joachim Nagel, is scheduled to take the podium at a “Future of European Finance" conference at the ASKO Europa-Stiftung Foundation.
Technical Analysis: EUR/USD falls below key level
EUR/USD has penetrated below the level of the 1.0867 swing lows and in doing so probably reversed the direction of the short-term uptrend. Now the odds slightly favor more losses.
Euro versus US Dollar: 4-hour chart
Subject to fundamentals, the price will probably continue to fall to the next key support level at roughly 1.0800 – the lows of wave B of the Measured Move that unfolded in February and early March.
Tuesday’s sell-off fell to a low of 1.0835 before recovering and thereby forming a bullish Japanese hammer reversal candlestick pattern on the 4-hour chart. This was followed by a little move higher. Since candlesticks are only short-term patterns, this upside could be at risk of petering out.
The daily chart below is showing the Moving Average Convergence/ Divergence (MACD) momentum indicator crossing over the signal line, giving a bearish sell signal, and adding further evidence to a change of trend.
However, it is also flagging up some key barriers to progress lower in the form of dynamic support from the red 50-day and then the green 200-day Simple Moving Averages (SMA).
Euro versus US Dollar: Daily chart
On Tuesday price penetrated the 50-day SMA situated at 1.0848 but was repulsed by the 200-day SMA at 1.0839. As on the 4-hour chart, the price recovered and formed a hammer candlestick on the daily chart as well.
For confirmation of the hammer’s bullish reversal potential, Wednesday needs to end on a bullish note as a green candlestick. If that is the case, EUR/USD is likely to continue its recovery higher.
Partners News
Thinking of KBC, stumped by KYC? Some answers for MF investors
What is the controversy around the MF KYC non-compliance?The Securities and Exchange Board of India, India's capital markets regulator, asked KYC registration agencies (KRAs) to verify mutual fund unitholders' KYC based on PAN, name, address, mobile number, and email IDs. The exercise intended...
By TradeRadius | 23 Minutes Ago
Nvidia’s Jensen Huang says human jobs won’t just go away because of AI
Nvidia Inc. chips are powering the artificial-intelligence revolution. But while Chief Executive Jensen Huang thinks AI will change the world, he doesn’t expect human jobs to just disappear.
By TradeRadius | 36 Minutes Ago
Apple and Amazon headline the most jam-packed earnings week for the quarter
By TradeRadius | 56 Minutes Ago
UK local elections loom for Sunak
By TradeRadius | 1 Hours Ago
Western banks in Russia paid €800mn in taxes to Kremlin last year
Figure represents a fourfold increase on prewar levels and comes as profits jump at European lenders still in the country
By TradeRadius | 1 Hours Ago
Singapore Unemployment Data Due On Monday
Singapore will on Monday release Q1 figures for unemployment, highlighting a light day for Asia-Pacific economic activity. In the three months prior, the jobless rate was 2.0 percent. Thailand is scheduled to release March numbers for imports, exports, trade balance and industrial production....
By TradeRadius | 2 Hours Ago
Why the Fed looks likely to scramble back to a hawkish stance
Here are some of the biggest questions facing Fed officials going into this week’s meeting.
By TradeRadius | 3 Hours Ago
Secretary of State Blinken headed back to Middle East, warns against Rafah incursion
April 28 (UPI) -- U.S. President Joe Biden confirmed his "ironclad support" for Israel's security in a conversation with Israeli Prime Minister Benjamin Netanyahu Sunday, according to a statement from the White House.
By TradeRadius | 3 Hours Ago
French government seeks to buy key assets from Atos
Paris wants sensitive parts of the indebted tech company to remain in national hands
By TradeRadius | 3 Hours Ago
Trump VP contender Kristi Noem stands by killing her dog Cricket amid bipartisan ridicule
Kristi Noem is competing against North Dakota Gov. Doug Burgum, Senator Tim Scott and Rep. Elise Stefanik, among others, for Trump's vice president spot.
By TradeRadius | 4 Hours Ago
Subscribe to get news