Podstawowa analiza

Yesterday, Draghi collapsed EUR / USD, what can we expect from the Fed?


On Tuesday, the central event of the day for the EUR / USD pair was the speech of the ECB head Mario Draghi, who signaled a possible resumption of stimulus measures following the July meeting of the regulator. These statements have fallen off the rate of the European currency, since many investors believe that in the future the ECB may lower the interest rate. In this case, the demand for European currency will remain low, as investors prefer higher-yielding assets. Accordingly, signals from the ECB reduce investor concerns about a possible easing of monetary policy by the Fed.

Today, Mario Draghi will again deliver a speech, but most likely, his speech will have a limited impact on the trades, since investors will focus all their attention on the FOMC meeting, which will result in a decision on interest rates and a new economic forecast. Experts say that the Fed will probably keep the level of rates unchanged, but may signal a decrease in their rates at future meetings.

On the eve of an important meeting of the financial regulator, Donald Trump decided once again to put pressure on the Fed head hinting at his possible resignation. But, later, his economic adviser Lawrence Kudlow declared that the White House was not considering the question of Powell’s resignation.

Yesterday, the price continued to move down, but could not reach the main goal, at the level of 1.1165. So far, the bulls manage to keep the price above yesterday's lows, therefore from the current positions we can expect the formation of a rolling back movement in the direction of 1.1210 and 1.1245, where the further price movement vector will be determined.

· Resistance levels: 1.1210, 1.1245, 1.1290.

· Levels of support: 1.1185, 1.1165, 1.1130.

The main scenario is a breakdown of resistance at 1.1210 and a correction to 1.1245, possibly higher.

The alternative scenario is to keep prices below 1.1210 and decrease to 1.1130.

Today we recommend looking at short-term longs from the level of 1.1185, with closing all positions until the FOMC meeting results are announced, which can drastically change the whole situation on the market.


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