-
EUR/USD is grinding its way higher, ignoring trade concerns.
-
Tension is mounting ahead of the Fed decision.
-
The technical picture is bullish for the pair.
EUR/USD continues its gradual uptrend, reaching the mid 1.1400s. The primary driver is the anticipation for a dovish Fed decision that weakens the US Dollar.
The world’s most powerful central bank is not expected to announce any policy changes in its meeting on Wednesday. However, there is a growing expectation that Fed Chair Jerome Powell will hint an early end to the balance sheet reduction program. With more greenbacks floating in the global system, the dollar is worth less. The focus on the balance sheet increased after a report in the Wall Street Journal on Friday suggested that officials are mulling a change.
Trade is also higher on the agenda. Chinese Prime Minister Liu He has arrived in the US for trade talks and is scheduled to meet US President Donald Trump. The mood has soured after the US charged Huawei, a prominent Chinese telecommunications and phone-maker, of stealing trade secrets and bank fraud. They are also moving forward with the extradition of Meng Wangzhou, the CFO of the company and the single child of the founder.
In the old continent. European Central Bank President Mario Draghi repeated familiar messages in a lengthy testimony in front of the European Parliament. He stroke a balance between factors related to the slowdown and encouraging signs from the labor market. Spain, the euro zone’s fourth-largest economy, reported a slight drop in the jobless rate to 14.5% in Q4 2018.
The calendar is quite light today, with the US Conference Board Consumer Confidence standing out with an expected drop.
In the UK, Parliament is set to vote on several amendments to the government’s Brexit plan. Uncertainty remains high. Any significant moves in the pound may influence the euro.
Any news related to trade will likely dominate as markets continue zooming in on the Fed.
To open a trading account contact the team at MerchantFX on 03 8939 1800
Be advised that TRADE SET-UP outcomes are unknown!
Market Timing is subject to unpredictable events that may adversely affect the outcome of each trade.
Please use appropriate Capital Management.
© MerchantFX 2018 ☏ 03 8393 1800 ✉ info@merchantfx.com.au
