CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Euro goes one-on-one with US dollar as markets prep for Fed rate hikes

Euro has found firmer footing as placid markets take hold; APAC equities have a good day after a late Wal Street rally and with central bank meetings everywhere, will they move EUR/USD?

The euro has steadied around parity in the lead-up to tomorrow’s Federal Open Market Committee (FOMC) meeting. The Fed is anticipated to jack up rates by 75 basis points (bp), the same shift that the European Central Bank made earlier this month.

In Sweden, today’s Riksbank monetary policy decision kicks off a busy week for central banks making adjustments to interest rates to combat high inflation.

While the focus will be on the Federal Reserve on Wednesday, other banks expected to make a policy shift in the next few days include the Bank of England, Swiss National Bank, South African Reserve Bank and Norges Bank.

The Bank of Japan will meet on Thursday, but it appears likely that they will maintain ultra-loose monetary conditions despite CPI coming in above forecasts today. Headline inflation was 3.0% year-on-year to the end of August instead of 2.9% forecast, but it did little to sway markets.

USD/JPY has had another quiet session, like most currency pairs today. Treasuries added a few basis points across the curve, with the benchmark 2- and 10-year bonds yielding close to 3.95% and 3.5% respectively

Crude oil has recovered from yesterday’s dip to be trading near to where it started the week. The WTI futures contract is approaching US$ 86 bbl while the Brent contract is a touch above US$ 92 bbl.

Likewise, gold has recovered from overnight losses to be back 1,675 US$ an ounce.

APAC stocks have had a good day after a positive cash session on Wall Street. Futures markets are pointing toward a good start to European and North American equity markets.

The US will see data on housing starts and building permits, while Canada will get CPI numbers.

The full economic calendar can be viewed here.

EUR/USD technical analysis

EUR/USD remains in a descending trend channel after several days of consolidation. The descending trend line is currently dissecting at the same level as the 55-day simple moving average (SMA) at 1.0100 and may offer resistance.

Last week’s peak of 1.0198 could also offer resistance.

On the downside, support might lie at the recent low of 0.9945 and 0.9864 ahead of the 0.9695, the 161.8% Fibonacci Extension of the move between 0.9953 to 1.0369

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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