By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
After some confident growth last Friday, the major currency pair is looking quite stable early in the final week of summer. EUR/USD is mostly trading at 1.1800.
The US Fed Chairman Jerome Powell said on Friday that the regulator might as well consider a possibility of an earlier reduction of its QE program before the end of the year without any particular dates. He also believes that the inflation boost was temporary. In his opinion, it wouldn’t be right to tighten the monetary policy right now.
As a result, the “greenback” got a clear signal: yes, the Fed agrees that the QE program volume should be slowly reduced but the regulator is not going to do anything about it right now.
In the H4 chart, after rebounding from 1.1738, finishing the ascending wave at 1.1770, and then breaking the latter level to the upside, EUR/USD is expected to extend the correction; it has already reached the short-term upside target at 1.1808 and right now is correcting downwards. Possibly, the pair may fall to return to 1.1770 and then start another growth towards 1.1815. Later, the market may resume trading downwards with the target at 1.1711. From the technical point of view, this scenario is confirmed by MACD Oscillator: after re-entering the histogram area, its signal line is moving to the upside.
Free Reports:
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Download Our Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
As we can see in the H1 chart, after breaking 1.1777 and finishing the ascending impulse with the short-term target at 1.1808, EUR/USD is correcting towards 1.1770. Later, the market may start another growth to break 1.1800 and then continue growing with the target at 1.1815. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: after breaking 50 to the downside, its signal line is steadily moving towards 20.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
- COT Metals Charts: Speculator bets led by Platinum & Silver May 18, 2024
- COT Bonds Charts: Speculator bets led by the 10-Year & 2-Year Bonds May 18, 2024
- COT Stock Market Charts: Speculator bets led by DowJones-Mini & Russell-Mini May 18, 2024
- COT Soft Commodities Charts: Speculator bets led higher by Corn & Wheat May 18, 2024
- Stoxx Europe 600: What Signs of Investor Exuberance Keep Telling Us May 17, 2024
- Natural gas prices rose to a 4-month high. China released mixed data May 17, 2024
- S&P 500 index hits record high amidst lower inflation May 17, 2024
- Stock indices have hit all-time highs. The Australian labor market is starting to cool down May 16, 2024
- Target Thursdays: USDInd, Soybean & EU50 hit targets! May 16, 2024
- JPY has sharply strengthened May 16, 2024