The price of the euro in dollars It fell to around 1.0800 during the second trading session of the week as demand for the US dollar gained momentum before lunchtime. The upbeat data from China failed to change the bad mood in the market as currency investors remain focused on central banks upcoming monetary policy decisions tomorrow and the day after.
The Federal Reserve and the European Central Bank (not forgetting the Bank of England) will announce their monetary policies in the next 48 hours. Asian indices struggled for a positive trend, but eventually gave in and targeted the negative zone, which initially affected the fibres.
The EUR has improved after the first bit of indecision
The Euro and the Dollar were initially unaffected by the positive data from the Euro-Zone, despite the better-than-expected GDP.
A preliminary estimate for the fourth quarter showed that the European economy grew at an annual pace of 1.9%, better than the 1.8% expected by analysts. This is definitely good news for the fiber bulls.
However, we have to bear in mind one negative, German retail sales which collapsed by 5.3% m/m last month (December), a much worse result than expected.
The Wall Street session will bring good data from the US side, including the Consumer Confidence report, expected at 109.1 in January, up from 108.3 in December, and the Chicago PMI, slightly down (45.0) from the previous figure (45.1). .
As shown in yesterday’s article, on Monday, January 30, the fibers reached the expected bearish target of 1.0800 and immediately rebounded, reaching 1.0850 in 4 hours; This may be the entry that will start the resumption of the upward movement, but of course it must first deal with the annual level hurdle of 1.0920.
Upside targets are always confirmed (annual levels 1.1075 and 1.1271) but it should be borne in mind that the meetings of the Federal Reserve and the European Central Bank are scheduled in the next two days, which will determine the future direction of the euro against the dollar.
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