There is a growing number of bets on softer US inflation. And of course, the main subtext of such forecasts is a hint that the Federal Reserve sees no point in further raising interest rates. This is precisely the main driving force behind the dollar’s weakening over the last few days. The main forecast is that inflation should decrease from 4.0% to 3.2%. US central bank officials made their statements regarding the need to further raise the refinancing rate based on these forecasts.
However, the market expects slightly different results. The most modest forecasts predict its slowdown to 3.1%. More daring ones even suggest that it will drop below 3.0%. Therefore, further developments will depend solely on today’s inflation data. If it turns out to be below 3.2%, we can see the US dollar weakening further. Only it will be relatively modest, as the US dollar is already substantially oversold. But if inflation only slows down to 3.2%, or even turns out to be above this level, a sharp turnaround will begin, and the dollar will quickly regain at least part of its recent losses.
The EUR/USD pair is staying above the 1.1000 level, indicating a high interest in the upward cycle.
On the four-hour chart, the RSI readings show that the market is trading the euro in the overbought territory. However, in the daily chart, the RSI indicates that the euro can rise even further.
On the same time frame, the Alligator’s MAs are headed upwards, which corresponds to the recovery phase.
Outlook
The euro is overbought in the intraday period. However, due to the ongoing momentum, speculators can ignore the technical signals. In this case, the quote will aim for the local high set in April. As for the bearish scenario, there’s a possibility that the current upward cycle may slow down, with a shift towards a pullback below the 1.1000 mark.
The complex indicator analysis unveiled that in the short-term, medium-term and intraday periods, indicators are providing an upward signal.
The material has been provided by InstaForex Company – www.instaforex.com
There is a growing number of bets on softer US inflation. And of course, the main subtext of such forecasts is a hint that the Federal Reserve sees no point in further raising interest rates. This is precisely the main driving force behind the dollar’s weakening over the last few days. The main forecast is that inflation should decrease from 4.0% to 3.2%. US central bank officials made their statements regarding the need to further raise the refinancing rate based on these forecasts.
However, the market expects slightly different results. The most modest forecasts predict its slowdown to 3.1%. More daring ones even suggest that it will drop below 3.0%. Therefore, further developments will depend solely on today’s inflation data. If it turns out to be below 3.2%, we can see the US dollar weakening further. Only it will be relatively modest, as the US dollar is already substantially oversold. But if inflation only slows down to 3.2%, or even turns out to be above this level, a sharp turnaround will begin, and the dollar will quickly regain at least part of its recent losses.
The EUR/USD pair is staying above the 1.1000 level, indicating a high interest in the upward cycle.
On the four-hour chart, the RSI readings show that the market is trading the euro in the overbought territory. However, in the daily chart, the RSI indicates that the euro can rise even further.
On the same time frame, the Alligator’s MAs are headed upwards, which corresponds to the recovery phase.
Outlook
The euro is overbought in the intraday period. However, due to the ongoing momentum, speculators can ignore the technical signals. In this case, the quote will aim for the local high set in April. As for the bearish scenario, there’s a possibility that the current upward cycle may slow down, with a shift towards a pullback below the 1.1000 mark.
The complex indicator analysis unveiled that in the short-term, medium-term and intraday periods, indicators are providing an upward signal.
The material has been provided by InstaForex Company – www.instaforex.com
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