Market Analysis

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January 10, 2019 11:01 am

EUR/USD Fundamental Analysis: January 10, 2019

The euro major pair was successful to have a bullish breakout in a wider price range for the past three months. It was driven mainly by a dovish Fed meeting after an update in China-US trade deal which was being followed by almost everyone. During the American session, the long-term resistance was broken at 1.14985 giving a good momentum after a bullish breakout as the price ranges at 1.15 followed by consolidation at Asian hours. Meanwhile, the Fed minutes pushed the price for a breakout which then underwent a bearish bias before the release of the Fed minutes given the dovish rhetorics from various FOMC members.

Some of the committee members are supports the rate hike amid the continuous slowdown since December throughout the world market, as well as, the US economy. Moreover, this shows that the majority of the members monitors the market carefully, considering the sluggish pace of rate increase along with the investor’s expectations to pause the rate hike plans this year. On a long-term perspective, this engages major fund flow in the market as a safe-haven currency with a risk of a recession for short-term due to Fed plans of multiple rate hikes. This greatly impacted the USD bulls and foster risk appetite in the market.

Meanwhile, investors attention are now on the ECB’s most recent minutes of the meeting as they look forward to the economic slowdown in the European market or hints on the possibility of an early rate hike by the central bank in 2019. This could further strengthen the euro bulls to break higher than the 1.16 mark.

As for the fundamental reports, the initial jobless claims, new home sales data and a speech from Fed Chair Jerome Powell are anticipated today from the US market that would likely bring short-term profit opportunities for retail traders.

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