Over the past week, the euro has traded in a range of about 130 points, but today’s opening was close to last Monday’s opening. The Marlin Oscillator on the daily chart is in the growth zone, but in fact it is in a sideways range on the neutral zero line. Markets are waiting for the Federal Reserve meeting on Wednesday. Data on producer price growth for November will be released tomorrow, and this growth is expected to be around 9.2% y/y versus 8.6% y/y in October.
These reports may be a sign that the Fed is preparing a tougher response to a new economic problem and there will be a shift in the general rhetoric of the central bank and its head Jerome Powell. At the moment, the markets are prepared for two rate hikes in 2022. If a shift in the sentiment of FOMC members occurs (through the so-called point forecasts on rates), then the euro can be expected at the target level of 1.1050.
If the Fed turns out to be relatively neutral, then investors will switch their attention to the European Central Bank meeting on Thursday, and this meeting is also expected to be hawkish. If it turns out to be such, then the euro can overcome the important resistance of 1.1415, which the MACD line has already approached, and continue to rise to 1.1572 (the peak of January 2019).
On the four-hour chart, the price is formally in an increasing situation – it is above the indicator lines and Marlin is in the growth zone. But, of course, the subsequent reaction of the market following the results of the Fed meeting, it does not matter. In general, the situation is more prone to falling – the pattern of the first half of November will repeat, when after the lateral movement of the Marlin (gray rectangle on the daily), the price fell.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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