EUR: Before Lagarde and the Fed minutes, the EUR/USD crosses over 0.9700.

Oct 12, 2022
VOT Research Desk

Market Insights & Analysis

Early in Europe, EUR/USD has overcome the immediate barrier of 0.9700. While the US dollar has recently risen, the risk profile is still low. The speech by Lagarde, US inflation figures, and Fed minutes now command attention.

During the Asian session on Wednesday, EUR/USD sellers are all set to wage yet another battle with the short-term key support around 0.9630 and a new intraday low near 0.9685.

The MACD indicator teases bears and suggests further downside for the quote despite the corrective bounce off the fortnight low the day before.

The EUR/USD pair’s failure to cross the 10-DMA hurdle, which is located around 0.9800, during Tuesday’s rebound also favors sellers. Additionally, the major currency pair’s sustained trading below the 50-DMA and downward-sloping trend line from June indicate a bearish trend.

The Federal Reserve (Fed) minutes will be in the spotlight on Wednesday. The reasons behind announcing the third 75-bps interest rate increase will be detailed in the Fed minutes. All Fed policymakers’ perspectives on interest rate targets for price stability will be included in the minutes. Aside from that, the current economic outlook will be of the utmost significance.

Following remarks made by Jamie Dimon, chairman and CEO of JPMorgan Chase, in which he expressed concern that the US economy might enter a recession within the next six to nine months, A sigh of relief has been released by US President Joe Biden’s remarks that “if recession will be there, it’ll be very slight.”

Investors are looking forward to the ECB President Christine Lagarde’s speech on the Eurozone front. The speech will shed light on the ECB’s upcoming monetary policy decision. Aside from that, the icing on the cake will be some clarity regarding the state of the Russia-Ukraine war.

Technical Indicators

EUR/USD