19:32 August 21, 2023
Recent dollar bulls have been too numerous EUR USD-Discounts, but as the week begins today, buyers come to the fore with the Eurodollar approaching the psychological 1.09 barrier.
As EURUSD recovers, stock market sentiment improves and Wall Street indices rise. The Eurodollar is likely to remain quite volatile this week, partly due to central bankers’ planned speeches at the Jackson Hole (Wyoming) symposium. Speakers at the event include ECB Chair Christine Lagarde and Fed Chair Jerome Powell (Friday).
- Powell’s hawkish pose and the cooling of the imagination of markets dreaming of first rate cuts in the first half of next year could strengthen the greenback and lead to a retest of the sub-1.09 area on EURUSD, but the market managed to bounce back to defend at important AT levels;
- Treasury yields have started to rise again, 30-year bonds have approached 2011 highs and 10-year bonds have hit their highest levels since November 2007 as investors price in a possible scenario of the Fed keeping rates higher for longer holds.
- UBS lowered its forecast for China’s real GDP growth in 2023 to 4.8% from 5.2%, and bonds from Goldman Sachs recently supported the dollar by reporting better-than-expected US GDP growth 2 percent announced in 2023.
The EURUSD chart on the D1 interval shows that the price has recently stopped at key support for further impetus provided by the SMA200 (the red line used for conventional trend determination) and the 23.6 Fibonacci -Reversal of the fall 2022 upswing is defined. For the buyers, a key resistance is located at 1.0925 where the SMA100 (black line) holds. If overcome, it could open the way to levels above 1.10.
source: xStation5 by XTB
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