EURUSD This Past Week
EURUSD has been the most trending currency pair in the forex industry these past couple of weeks. Both the United States and Europe have been witnessing major economic shifts in their respective regions, which has been causing this major currency pair to take the brunt of the impact. From the United States, weโve got the rising inflation crisis causing major havoc to the citizens of the country and around the world. From Europe, weโve been witnessing horrific warzones occurring between Russia and Ukraine. This war crisis seems unlikely to end any time soon, although we can only remain optimistic.
EURUSD Market has reached the higher low area of the Ascending triangle pattern.
With both these crises tugging at this forex pair from either side, EURUSD has been quite all over the place this past week. The week had a slow start with EURUSD eyeing the 1.09 region. It remained mainly stable in that region for a few days with slight shifts up and down before returning back to the same mark. However, mid-week we witnessed the first major move when this currency pair shot up to the 1.113 mark. This came after Ukraine rejected the terms of the 15-point treaty presented by Russia. Russia tried to end the war diplomatically but the terms did not mean well for the people of Ukraine and therefore it was rejected. Following the news, this popular currency pair has been fluctuating around the 1.10 mark till the end of the week.
ECB Christine Lagarde Speech
Earlier on Monday, the President of the European Central Bank, Christine Lagarde, held a speech where she discussed the monetary policies and economic conditions of the region. The speech was held in Paris and was one of the most highly anticipated speeches for the week as it would potentially decide the pattern the markets will be taking going forward. In her speech, Lagarde dismissed any risks of stagflation for the economy. What this means is that she reassured the people that with the current monetary policies, the inflation rate would be under control and unemployment wonโt be on the rise. She believes the economy will soon start to thrive once again and be back to how it always used to be.
Some top analysts had their own thoughts on the stagflation situation in the economy. Analysts from the Bank of America state, โHigh inflation also saw banks gain corporate market share from bonds, as companies prefer floating rates when fixed are elevated. Todayโs PE reflects years of structurally low profitability, which higher interest rates will resolve.โ Russ Mould, Investment Director at AJ Bell also had a few words to say on the UKโs performance in terms of price maintenance during inflation. He states, โThis resilient performance has helped to put the UK back on the map for overseas investors looking to diversify their holdings.โ
Biden And Xi Talks
Early on Friday, President Joe Biden of the United States held a meeting with President Xi Jinping in order to clear up some misunderstandings surrounding the stance of China on the ongoing war between Russia and Ukraine. There were rumors going around that China was siding with Russia in order to perhaps gain a trading relationship with them in the future.
Biden was unhappy with these rumors as he did not wish to build a good relationship with a country that was siding with his enemies. However at this conference, President Xi Jinping revealed that these rumors are false and that he would much rather continue on good trading terms with America instead of building a new one with Russia. He reassured Biden that in case the war escalates, China would be fighting alongside the States.
Several reporters and analysts had a few words to say on the events discussed during this conference call. Wendy Sherman, Deputy Secretary of State had come out in a statement saying, โChina should understand that their future is with the United States, with Europe, with other developed and developing countries around the world. Their future is not to stand with Vladimir Putin.โ Antony Blinken, Secretary of the State had also said in a statement, โBiden will make clear that China will bear responsibility for any actions it takes to support Russiaโs aggression and we will not hesitate to impose costs. China should use whatever leverage they have to compel Moscow to end this war. I am concerned that theyโre considering directly assisting Russia with military assistance.โ
EURUSD Today
Ever since the market opened on Monday, EURUSD has been struggling to stay above hot waters. It has been acting extremely volatile and is showing bearish market conditions. EURUSD is currently teasing around the 1.03 mark and is quickly descending further down the charts.
EURUSD market is moving in the Box Pattern and rebounded from the Support area of the Box Pattern and Symmetrical triangle pattern.
This volatility came in anticipation of the ECB speech by President Christine Lagarde. However, the speech did not release any important information which would help analysts better predict the movement of the market prices this week. The only other matter possibly pulling EURUSD in the other direction is the anticipation of the Feds Powell speech which is expected to occur later today. Analysts recommend awaiting the remarks from this speech as EURUSD is currently unstable and is dropping and shooting every few seconds. This is not a currency that needs to be messed with at the moment.
Upcoming Important Events
As discussed previously, today weโre expecting a speech by the Feds President, Jerome Powell. He is the most influential person in terms of deciding monetary policies for the country. He will be providing insights into the current economic position of the country. Analysts are hopeful that these insights will shed some light on the future interest rate hikes for the economy as well. He is also expected to reveal how his monetary policies will help bring the economic conditions of the country back under control. Later this week, weโre also expecting to hear from the Governor of the Bank of England, Andrew Bailey. He is the head of the BOEโs Monetary Policy Committee and therefore his speech is crucial in determining what the future of the pound looks like in the current economic conditions of the country.
