The euro chose to wait within the range of 1.0738-1.0804 ahead of the Federal Reserve meeting, rather than the previously anticipated range of 1.0692-1.0738. Technical indicators in the new range feel more at ease, with the Marlin oscillator approaching the neutral zero line.
However, this calmness is likely to be disrupted. The ZEW Economic Sentiment Index for the eurozone is projected to worsen from -9.4 to -11.9 in June. The evening will bring the main event of the day – the release of US CPI data. The consensus forecast suggests a decline in the overall index from 4.9% YoY to 4.1% YoY, and a decrease in the core index from 5.5% YoY to 5.3% YoY.
The projected decline in inflation is optimistic, but at the moment, we consider it a secondary factor. If the Fed intends to raise interest rates, then weak data will be released, as inflation, like employment, are heavily manipulated fundamental indicators in the US.
We see a slight discrepancy between market expectations and the Fed’s stance on interest rates, which is quite understandable, as rate hikes strongly impact businesses, and the market needs a confirmation of the rate hike, as it has been ignoring verbal signals from FOMC members given previously, as well as rate hikes by other central banks. Yesterday, investors increased the probability of a 0.25% rate hike to 30%.
However, this is not enough, so the signal must be more specific, which is expected to be provided by today’s inflation data published by the US Bureau of Labor Statistics. If CPI data does not come out poorly, uncertainty about the interest rate will become particularly high.
The situation is neutral on the four-hour chart. The price is developing above the balance and MACD indicator lines, but the Marlin oscillator is attempting to move into negative territory. We await further developments. Target levels are marked on the chart.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
If you have an interest in any area of Forex Trading, this is where you want to be.
Global Fx Trading Group is a world leader in providing Fx services, o individual traders, including: Unmatched funding programs, on-line education, virtual trading rooms, automation tools, robot building, and personal coaching.
The company was first established by Jeff Wecker, former member of the Chicago Board of Trade, with 25 years in the industry. Jeff has a keen understanding of the needs of Forex traders and those needs are our focus.
Please join our VIP Group while is still FREE …
https://t.me/joinchat/JqsXFBKpyj3YS4bLWzT_rg
Our mission is simple: To enhance as many lives as we can through education and empowerment.
#theforexarmy #forexsigns #forexsignals #forexfamily #forexgroup #forexhelp #forexcourse #forextrade #forexdaily #forexmoney #forexentourage #forextrading #forex #forexhelptrading #forexscalping #babypips #forexfactory #forexlife #forextrader #financialfreedom
