FOMC Chairman Powell has been clear in his communication that a rate cut is not on the table for March. Where to from here for EUR/USD?
The pair has found support and has completed a (sloppy) head and shoulders formation with a double bottom at 1.0723. The weekly uptrend line has been broken but wait for the weekly close to determine direction.
Immediate resistance on the hourly chart is at 1.0764-1.0780 and a 15 minute close above will take us back to the daily resistance zone between 1.0833-1.0845. The 200 SMA is also at that level at the moment.
Fundamentally, the USD is supported by a resilient economy and mind blowing job numbers this past Friday. The soft landing for the US economy is still possible.
However, the CPI and retail sales for USD next week will provide better insight. On that note, I am wondering to what degree we'll see a dramatic drop in retail sales for January, with the American consumer being tempted with BuyNowPayLater at every E-commerce site. It might have distorted the true strength of the consumer towards the end of 2023. Let's face it, the Government is borrowing like there is not tomorrow and as consumers we are merrily skipping along.
However, retail sales is only a factor in the FOMC decision making, so back to dual mandate of maximum employment(done and done) and stable prices(still in the works). Institutional investors may also consider the immense USA debt($33 trillion) in their decision making vs. the relative stability of the EuroZone debt($14.7 trillion).
Keep an eye on the JPY for risk and also the 10Y USA treasury.
The pair has found support and has completed a (sloppy) head and shoulders formation with a double bottom at 1.0723. The weekly uptrend line has been broken but wait for the weekly close to determine direction.
Immediate resistance on the hourly chart is at 1.0764-1.0780 and a 15 minute close above will take us back to the daily resistance zone between 1.0833-1.0845. The 200 SMA is also at that level at the moment.
Fundamentally, the USD is supported by a resilient economy and mind blowing job numbers this past Friday. The soft landing for the US economy is still possible.
However, the CPI and retail sales for USD next week will provide better insight. On that note, I am wondering to what degree we'll see a dramatic drop in retail sales for January, with the American consumer being tempted with BuyNowPayLater at every E-commerce site. It might have distorted the true strength of the consumer towards the end of 2023. Let's face it, the Government is borrowing like there is not tomorrow and as consumers we are merrily skipping along.
However, retail sales is only a factor in the FOMC decision making, so back to dual mandate of maximum employment(done and done) and stable prices(still in the works). Institutional investors may also consider the immense USA debt($33 trillion) in their decision making vs. the relative stability of the EuroZone debt($14.7 trillion).
Keep an eye on the JPY for risk and also the 10Y USA treasury.