The single European currency came under significant pressure in the wake of the decisions of the European Central Bank, retreating significantly from its peaks of 1,1030, in which he had been after the Fed's decision to raise interest rates and the statements of the chairman Jerome Powell.
In a shocking week so far we have seen strong fluctuations with the European currency temporarily hit new peaks but without so far being able to maintain them.
The development of the market and the announcements were in general quite expected as the amount of the interest rate increase was fully within the estimates and statements of the central bankers were not particularly surprising.
The European currency appeared to be particularly favored after the US Federal Reserve's decision and the statements of the Fed chairman which maintained the latest dovish rhetoric.
Thus the optimism that President Lagarde will maintain a hawkish policy sent the pair to new peaks surpassing the level of 1,10.
Nevertheless, as I pointed out in yesterday's article, all the data were quite '' discounted '' in favor of the European currency and even if President Lagarde did not disappoint the European currency, it was not able to secure and mainten the high levels.
Once again the strategy of buying the US currency at new highs turned out to be a good idea. Although there was some concern as the new top was considerably higher than the previous one and temporarily the position in favor of US dollar created increased concern.
Now the market has turned its attention to today's announcement on the new jobs in the United States, an extremely strong macroeconomic data that traditionally creates significant market moves.
With strong US jobs data which will be at least on estimates and maybe better, it will be very difficult for the European currency to return to recent peaks.
I mentioned just yesterday and although the European currency was holding high prices that the last bullish cycle of the Euro might be near to the end and the latest market picture is starting to create this perspective.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.