Get 100% free daily technical analysis, precise chart setups, and actionable insights for Forex, Metals, and Indices. Identify key support zones and target levels to make informed trading decisions every single morningβno subscriptions or paywalls required.
The Euro is expected to continue losing its positions. However, the downward movement is forming as an impulse, which lacks a final surge to complete it. It is possible that the anticipated wave iii is stretching in this case.
The US dollar maintains its advantage ahead of the Fed meeting. Accelerating inflation and strong labor market data have convinced market participants of a high probability of an interest rate hike. Additional support for the US currency comes from the yield on 10-year US Treasury bonds, which remains near multi-year highs.
The price is trading in a comfortable zone, below the daily balance level of 1.1596. The price has formed an active absorption pattern and created a new bearish model, with the main target at the 1.1554 level. The current daily balance level is an excellent entry point for selling and strengthening the downtrend down to 1.1531. The trend strength indicator indicates selling activity at 83.3%. A strong resistance level for the price is around 1.1623.
Long-term trend: long. The maximum accumulation of volumes for the current contract is located in the range with quotes 1.15940β1.16100. Currently, investment operations on the pair are being carried out below the specified range, which indicates weakness among buyers.
The situation continues to develop according to the previously considered plan. The euro is under pressure and weakening. At times, the price accelerates too strongly, as if trying to form the missing waves in a single moment. However, the market does not like such haste and pushes the rate back, so that it can traverse this path again, but at a more relaxed pace.
The euro begins the week after the ECB raised its interest rate by 25 basis points. The regulator raised the deposit rate to 2.50% and indicated that inflation will remain above target for longer than expected. This supports the euro, but the effect of the decision has already been partially priced in by the market, while rising energy costs simultaneously increase risks for the eurozone economy.
Monthly option contracts are trading in the comfort zone below the daily balance level of 0.7162. The price has formed a downward impulse with a target at 0.7078. The main target of the downward impulse is around 0.7010, where buying is favorable. The current daily balance level is excellent for selling. A continuation of the downward impulse is expected. An alternative scenario is considered only if the price stabilizes above the 0.7162 level, with a target of 0.7210. Selling at this stage is considered the main scenario. DS indicators on the buyer side are at 14% for the week and 11% for the month. The main weekly scenario is selling the pair.
The main driver of the week for gold is the Fed meeting against the backdrop of accelerating inflation and a new surge in oil prices. The market assesses a high probability of an interest rate hike, while higher yields on US Treasury bonds reduce the attractiveness of the asset, which does not generate interest income.
The EUR/USD pair settled around 1.1600 for a third consecutive week, unable to find a clear way despite key macroeconomic headlines. The pair held within a tight 100-pip range for the second week in a row, as speculative interest awaits the Federal Reserve (Fed) monetary policy announcement scheduled for Wednesday.
Gold (XAU/USD) struggled to shake off the bearish pressure as US Treasury bond yields climbed higher this week. Investors gear up for the Federal Reserveβs (Fed) critical policy meeting, which could trigger the next directional action in the precious metal.
