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market analysis
If the euro wants to stand firm at 1.18, what is missing is only the end-of-catalysis?
Wonderful introduction:
A person's happiness may be false, and a group of people's happiness cannot tell whether it is true or false. They squandered their youth and wished they could burn it all, and that posture was like a carnival before the end of the world.
Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: If the euro wants to stand firm at 1.18, what is missing is the end-of-catalysis?". Hope it will be helpful to you! The original content is as follows:
On Tuesday (September 16), the foreign exchange market focused on the German ZEW economic prosperity and current situation index to be released at 17:00. Previously, the US dollar index (DXY) fell to 97.00 near the low of the past seven weeks, while the euro/dollar rose in the session and hit the 1.1800 line, hitting a new high since July 3. The short-term resonance of technology and fundamentals pushed the exchange rate up.
Brand:
German ZEW prosperity index is expected to be 27.3 in September (previous value of 34.7), and the current index is expected to fall to -75 (previous value of -68.6). If the data is stronger than expected, it will strengthen the expectations of the largest economy in the euro zone and give the euro additional marginal support; if it is less than expected, considering that the market's subsequent further interest rate cuts have tended to decline, and the bets on more aggressive easing of the Federal Reserve (Fed) have heated up, the downward response to the exchange rate may be limited.
In terms of the ECB, the management xm-forex.committee Isabel Schnabel said that the current interest rate is "suitable", but the risk of upward inflation is still dominant; Peter Kazimir emphasized that policies should not be adjusted due to "slight deviations around the target", and said that interest rates have entered the neutral range, and the overall expression is "prudent hawkish", forming psychological support for the euro.
On the US side, CMEFedWatch showed a 96% chance of cutting interest rates by 25bp to 4.00%-4.25% in this meeting, and the remaining bets cut interest rates by 50bp. The initial unemployment claims last week hit 263K (a four-year high). Coupled with the rise in employment risks, market expectations for dovish tendencies have heated up, suppressing the elasticity of the US dollar. Retail sales in August later today are expected to be 0.3% month-on-month (previously 0.5%), which will be slowed down.Further strengthen the passive weakening logic of the US dollar. Overall, the repricing of macro differences + policy expectations continues to constitute a tailwind for the euro.
Technical surface:
Daily chart shows that the middle rail of the Bollinger band is 1.1685, the upper rail is 1.1780, and the lower rail is 1.1591. The current price of 1.1792 has been pressed on and slightly up the track. If it breaks further, it will point to the integer psychological threshold of the upper band highs of 1.1829 and 1.1900. The candle chart shows a pushing structure in the ascending channel in the recent stage, and the retreat is mostly along the middle track to obtain kinetic energy repair.
MACD shows DIFF0.0030, DEA0.0021, and cylinder 0.0018, both stand above the zero axis and expand weakly, the kinetic energy is positive but not hot; if the cylinder cannot continue to amplify, there is a risk of passivation of short-term kinetic energy. RSI (14) is located at 60.4884, in a mild and relatively long range, and has not entered the overbought yet. Structurally, the two lows 1.1405 and 1.1391 superimpose the key medium-term support belt; the above 1.1800-1.1829 are dense resistance clusters. Conclusion of xm-forex.comprehensive indicator resonance: The trend is still upward, with dense resistance on the upper edge, and short-term relies more on fundamental catalysis to achieve "effective breakthroughs".
Presentation observation:
From the three-dimensional perspective of price-indicator-narrative, market sentiment tends to bullish market sentiment:
Price dimension: The exchange rate is on the upper edge of Bollinger, and the trend trading template of "price is on the belt and on the belt" is established, but the willingness to chase the rise near the upper track is suppressed by the resistance cluster.
Indicator dimension: RSI60.49 did not hit the top, MACD was positive but the cylinder was mild, showing "not restless optimism" rather than overheating.
Narrative dimension: ECB's cautious hawkish + Fed's dominant policy spread is repriced, providing a relative advantage for the euro; but the weaker ZEW expectations and uncertainty in US consumption data have made sentiment remain optimistic and restrained. The emotional cap depends on the data surprise and the wording of the Fed statement. Once there is a lack of "increment", the risk of a false breakthrough in the technical level increases, triggering the regression trading tendency of the mean regression of the middle track.
Future Outlook:
Short-term Path (Data Driven):
Favoritable Scenario: If ZEW is significantly stronger than 27.3 and US retail sales slow down to 0.3% or less, and the Federal Reserve's resolution and the Chairman's speech send a dovish signal, the exchange rate is expected to break through the 1.1800 resistance band with a large volume, try 1.1829 and expand to the historically dense zone above 1.1850; at this time, we need to pay attention to whether Bollinger bandwidth expands simultaneously to confirm the effectiveness of the breakthrough.
Neutral/slightly short scenario: If ZEW is less than expected or the US data is strong, the US dollar will rebound in a phased rebound, and the exchange rate may retreat from the upper edge and return to the 1.1685 middle track; if it falls below and closes below it, it will significantly increase the probability of the 1.1591 lower track.
Medium-term framework (policy difference and growth difference):
The medium-term elasticity of the euro still depends on whether the eurozone growth recovery can be fulfilled and the Federal Reserve's interest rate cutRhythm. If domestic demand in the euro zone improves and inflation stickiness remains, the ECB's "longer and higher" caliber will delay the easing time, forming a spread to converge with the faster easing of Fed, supporting the relatively strong euro; on the contrary, once the euro zone data continues to weaken and the US economy is moderate and accelerates again, the euro/dollar may turn to range consolidation again, and the box around 1.1591-1.1800 will be tug-of-war longer.
xm-forex.comprehensive judgment: The trend is still relatively large, but the upper edge is crowded and the kinetic energy is relatively warm. "Breakthrough requires incrementality, and retracement is the norm." The key to short-term is whether the ZEW and US data are consistent in the direction of the direction, whether the performance ignites the volume breakthrough.
The above content is all about "[XM Foreign Exchange Platform]: The euro needs to stand firm at 1.18, what is missing is just a temporary catalysis?". It was carefully xm-forex.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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