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January 11, 2019 12:48 pm

EUR/USD Fundamental Analysis: January 11, 2019

The euro major pair is anticipated to have an upbeat trading for the day and closes over the 1.15 handle for the week but soared over the weekly high of 1.1571 level despite the more risk appetite in the market due to headlines from the European market. The common currency declined against the US dollar after a bounce off the dollar on placing orders in risky assets. This was further influenced by the bearish signals from the ECB minutes as the council members wanted to maintain the interest rate at the present figure to summer of 2019, even despite of market conditions to make sure of the present convergence of inflation to levels lower but close to the 2 percent amid the current situation of the euro.

On the trade talk topic, the prolonged uncertainty on the disagreement of the removal of tariffs on the European market still affects the market sentiment.

Another news regarding the attempt of US President Donald Trump to improve trading in his “America first” idea with various countries such as Canada, Mexico, and Japan as these nations found means to move forward with the trade talks. Although, European Union is centered on the opening of the automobile market for a trade deal, excluding the agriculture sector may have hurt the negotiations with the US without any signs of decline as it negatively influences traders’ sentiment on the common currency that resulted to a decline lower than 1.15 for a while during Thursday trading session.

Yet, the widespread risk appetite supported risk assets from yesterday’s low and lead the trade after the Fed Chair Jerome Powell’s speech last night. Although, he doesn’t agree on the economic slowdown in US strong labor market which kicks off momentum to economic growth. His opinion was also supported by other Fed members opinion earlier this week as he says the Fed being patient on rate hike plans given the low inflations and allows minimal variability but still in control on the FOMC action on future changes in monetary policy. Hence, the market made suppositions om possible rate hike of the Fed in 2019, damping down greenback’s rebound in the broad market. After the news reached the market telling that an official from China would schedule to visit the US in the second half of the month to discuss future trade talks the supported strong bulls at the Asian session.

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