1. Home
  2. /News
  3. /Decisive Moment for EUR/USD, But It Depends on the FED and ECB

Decisive Moment for EUR/USD, But It Depends on the FED and ECB

Skerdian Meta•Thursday, February 9, 2023•2 min read

EUR/USD used to be very bullish in the last four months but the outlook might have changed, as the economic data starts to improve in the US, which has pushed the terminal top for FEC rates above 5%. This means that the FED might keep raising rates a while longer than expected a week ago and keep them high for some time, which would be a bullish sign for the USD.

FED member Waller said yesterday that the job on inflation isn’t done and this might be a ‘long fight’. ECB’s Knot sees first signs of tightening in the housing market and credit for housing, although he added that they have more ground to cover than the FED, which is a bullish comment for EUR/USD.

EUR/USD surged above 1.10 after the FOMC meeting last Wednesday, with Chairman Powell mentioning rate cuts if the data supports them. But made a strong bearish reversal On Friday as the US data showed a bounce in some sectors, which removes recession fears.

EUR/USD fell below 1.07 and it broke the 200 SMA (purple) on the way, which used to be the last line of support for this pair during the uptrend. Now that moving average, as well as the 20 SMA (purple), have turned into resistance on the H4 chart above.

EUR/USD Daily Chart – Sellers Testing the 50 SMA

A bullish reversing pattern is forming on the daily timeframe

But, on the daily chart, the trend is still bullish and this latest bearish move which has lasted for about a week looks more like a due retrace before the next bullish move higher. The retreat seems to be complete as the stochastic indicator is oversold on this timeframe. So, there is a chance that we might see a bounce from here, although Tuesday’s doji candlestick which is a bullish reversing signal, wasn’t followed by a bullish daily candlestick yesterday. I suppose markets are waiting for more facts from the economic data to see where the FED and the ECB will head next.

EUR/USD Live Chart

EUR/USD
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
img
GBPUSD Falls Below 1.26 After Decline in UK Unemployment Rate, FTSE 100 at 8,800
3 days ago
Forex Signals Brief Feb 14: Eurozone GDP, US Retail Sales Close the Week
1 week ago
Forex Signals Brief Feb 13: More Inflation Data and Tariff Talk
Today we have more inflation reports from several countries, UK GDP and the usual trade tariff talk, which will drive markets around.
1 week ago
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Add 3442

Add 3440