In this post I will mention the recent fundamentals and what to expect ahead accordingly?
FUNDAMENTAL KEY QUOTES
1- FOMC statement analysis
- Fed held interest rates near zero, and will maintain asset purchases at $120 billion a month until " substantial progress " is made on inflation and employment -
- Fed inched toward trimming the emergency stimulus adapted at the start of the pandemic by signaling the process may start this year -
2- German inflation jumped to the highest level since 2008 as coronavirus restrictions were lifted and economy reopened.
3- According to calendar release the Core PCE Price Index (MoM) (Jun) has dropped to 0.4% signaling a modest drop in the U.S. inflation, also the initial jobless claims showed a modest progress of drop to 400K from previous output of 425K.
4- ECB policy updates ( will persist with ultra loose stimulus until it has solid evidence it can sustainably hit its new inflation goal of 2% ) ( THIS MEANS POLICY MAKERS CAN KEEP RATES AT A RECORD LOW FOR LONGER AND EXTEND ITS BOND BUYING, WON'T NECESSARILY REACT IMMEDIATELY IF INFLATION OVERSHOOTS THEIR TARGET FOR A PERIOD )
SPOTLIGHTS
- HOLDING THE UPPER RANGE OF 1.1950-1.1850 IS AT RISK OF FALLING DUE TO THE ( RISE IN GERMAN INFLATION, DROP IN CORE PCE PRICE INDEX (MoM)(Jun) ) -
- EVEN THOUGH FED ANNOUNCED NO ACCURATE DATE TO DELAY TAPERING, STILL IT HAS A BETTER MONETARY POLICY THAN ECB (DOVISH, KEEPING THE BOND BUYING PROGRAM FOR LONGER TIME WHICH MEANS MORE PRINTING EUR WHICH IS NEGATIVE FOR THE CURRENCY)
- EU UPBEAT DATA CAN ONLY PUSH FOR HOLDING THE LONGER TERM PRICE RANGE 1.1950 PEAK AND TO BE FOLLOWED BY SOFT REVERSALS -
- BREAKING ABOVE 1.1950 ONLY TO BE CONFIRMED BY ANY SHIFT IN THE ECB MONETARY POLICY -
CONCLUSION
- SHORT TERM PRICE RANGE (1.1900-1.1800), BUT IF TO EXPECT ANY INTENSE MOVEMENTS THEN IT WOULD BE (1.1920-1.1780) -
- LONG TERM PRICE RANGE (1.1950-1.1750) -
- MONETARY POLICY SENTIMENT IS STILL ON THE USD SIDE BUT HOLDING THE UPPER RANGE IS DUE TO UPBEAT EU CALENDAR DATA -
- TO HOLD SHORT POSITIONS FROM ANY POINT NEAR (1.1920-1.1950) CONSIDERING FAKEOUTS CAN EXTEND TO 1.1970 BUT IS VERY LOW EXPECTED -
- TO CONSIDER 50-60 PIPS PROFIT DUE TO THE EXPECTED VOLATILITY -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -
FUNDAMENTAL KEY QUOTES
1- FOMC statement analysis
- Fed held interest rates near zero, and will maintain asset purchases at $120 billion a month until " substantial progress " is made on inflation and employment -
- Fed inched toward trimming the emergency stimulus adapted at the start of the pandemic by signaling the process may start this year -
2- German inflation jumped to the highest level since 2008 as coronavirus restrictions were lifted and economy reopened.
3- According to calendar release the Core PCE Price Index (MoM) (Jun) has dropped to 0.4% signaling a modest drop in the U.S. inflation, also the initial jobless claims showed a modest progress of drop to 400K from previous output of 425K.
4- ECB policy updates ( will persist with ultra loose stimulus until it has solid evidence it can sustainably hit its new inflation goal of 2% ) ( THIS MEANS POLICY MAKERS CAN KEEP RATES AT A RECORD LOW FOR LONGER AND EXTEND ITS BOND BUYING, WON'T NECESSARILY REACT IMMEDIATELY IF INFLATION OVERSHOOTS THEIR TARGET FOR A PERIOD )
SPOTLIGHTS
- HOLDING THE UPPER RANGE OF 1.1950-1.1850 IS AT RISK OF FALLING DUE TO THE ( RISE IN GERMAN INFLATION, DROP IN CORE PCE PRICE INDEX (MoM)(Jun) ) -
- EVEN THOUGH FED ANNOUNCED NO ACCURATE DATE TO DELAY TAPERING, STILL IT HAS A BETTER MONETARY POLICY THAN ECB (DOVISH, KEEPING THE BOND BUYING PROGRAM FOR LONGER TIME WHICH MEANS MORE PRINTING EUR WHICH IS NEGATIVE FOR THE CURRENCY)
- EU UPBEAT DATA CAN ONLY PUSH FOR HOLDING THE LONGER TERM PRICE RANGE 1.1950 PEAK AND TO BE FOLLOWED BY SOFT REVERSALS -
- BREAKING ABOVE 1.1950 ONLY TO BE CONFIRMED BY ANY SHIFT IN THE ECB MONETARY POLICY -
CONCLUSION
- SHORT TERM PRICE RANGE (1.1900-1.1800), BUT IF TO EXPECT ANY INTENSE MOVEMENTS THEN IT WOULD BE (1.1920-1.1780) -
- LONG TERM PRICE RANGE (1.1950-1.1750) -
- MONETARY POLICY SENTIMENT IS STILL ON THE USD SIDE BUT HOLDING THE UPPER RANGE IS DUE TO UPBEAT EU CALENDAR DATA -
- TO HOLD SHORT POSITIONS FROM ANY POINT NEAR (1.1920-1.1950) CONSIDERING FAKEOUTS CAN EXTEND TO 1.1970 BUT IS VERY LOW EXPECTED -
- TO CONSIDER 50-60 PIPS PROFIT DUE TO THE EXPECTED VOLATILITY -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -