EURUSD: Unpopular opinion - fundamental says - SHORT
The positive sentiment of other traders might lead them to overshoot, as I can see that people are expecting a bullish correction. However, the EU's hesitancy regarding interest rates, combined with the steadfastness of the US, points in a different direction.
Fundamental:
The U.S. Federal Reserve (Fed) is not ending its record-breaking interest rate hike program just yet. Such conclusions are drawn from the latest readings of the U.S. GDP and job market, which significantly surpassed expectations.
Jobless claims came in at 221,000, compared to the expected increase to 235,000 from the previous 228,000. The reading was accompanied by a completely unexpected decline in continuing claims to 1.69 million, down from the previous 1.75 million. These robust figures may also indicate a positive surprise in the Non-Farm Payrolls (NFP), which is now the market's focus.
On the other hand, the U.S. GDP in Q2 significantly exceeded forecasts, showing a growth rate of 2.4% compared to the previously recorded 2% and the analysts' projected 1.8%. The U.S. economy demonstrated considerable strength and remains resilient despite the record-breaking cycle of Fed rate hikes lasting for over 40 years.
A fly in the ointment for USD bulls (although objectively it's very good news) was the quarterly reading of core PCE inflation, which is the Fed's preferred measure of inflation dynamics. It fell below investors' expectations, and despite the positive data that could favor further rate hikes, it limits the chances of additional hawkish increases.
Technical:
We are in key zone with probably small bullish correction, but we have bearish trend in 2 weeks. Possible rebound and continuation of the trend
Fundamental:
The U.S. Federal Reserve (Fed) is not ending its record-breaking interest rate hike program just yet. Such conclusions are drawn from the latest readings of the U.S. GDP and job market, which significantly surpassed expectations.
Jobless claims came in at 221,000, compared to the expected increase to 235,000 from the previous 228,000. The reading was accompanied by a completely unexpected decline in continuing claims to 1.69 million, down from the previous 1.75 million. These robust figures may also indicate a positive surprise in the Non-Farm Payrolls (NFP), which is now the market's focus.
On the other hand, the U.S. GDP in Q2 significantly exceeded forecasts, showing a growth rate of 2.4% compared to the previously recorded 2% and the analysts' projected 1.8%. The U.S. economy demonstrated considerable strength and remains resilient despite the record-breaking cycle of Fed rate hikes lasting for over 40 years.
A fly in the ointment for USD bulls (although objectively it's very good news) was the quarterly reading of core PCE inflation, which is the Fed's preferred measure of inflation dynamics. It fell below investors' expectations, and despite the positive data that could favor further rate hikes, it limits the chances of additional hawkish increases.
Technical:
We are in key zone with probably small bullish correction, but we have bearish trend in 2 weeks. Possible rebound and continuation of the trend