EUR/USD: Riding the Dollar's Downturn, Eyes on 1.2000
The US Dollar's bearish slide continues, fueling anticipation of the EUR/USD potentially reaching 1.2000 this week, following its recent break above 1.1000.
The Fed's Shifting Stance
While the dollar previously held its ground due to expectations of prolonged high rates, the situation has flipped. Inflation concerns have eased, and Fed officials, including Jerome Powell, have adopted a more dovish tone. This shift, combined with disappointing labor market data and a softer CPI print, triggered a wave of dollar selling earlier this month.
Key Events on the Horizon
Two critical events this week could reshape the dollar's trajectory:
FOMC Meeting Minutes (Today at 7:00 PM London Time)
These minutes offer a deeper look into the Fed's July decision-making process, revealing their views on the economy and potential policy actions. The market will closely scrutinize any clues about future rate cuts.
Jackson Hole Symposium
This annual gathering of central bankers and economists sets the stage for crucial economic discussions. Fed Chairman Jerome Powell's speech will be particularly significant, as traders eagerly await hints about the potential rate-cutting cycle in 2024.
Possible Scenarios
Dovish Powell: If Powell signals further rate cuts beyond current expectations, the dollar's decline is likely to accelerate.
Data-Dependent Powell: If Powell echoes the ECB's cautious stance, emphasizing a data-driven approach, the dollar could see a short-term bounce toward 1.1000. However, the long-term outlook remains tilted towards depreciation due to the Fed's shift in monetary policy.
Trade with Caution
While the current environment favors the euro, traders should remain vigilant. Upcoming events have the potential to spark significant volatility. Consider appropriate risk management strategies, including stop-losses, to protect your capital.
*This post is for informational and educational purposes only. It should not be considered financial or investment advice.
The Fed's Shifting Stance
While the dollar previously held its ground due to expectations of prolonged high rates, the situation has flipped. Inflation concerns have eased, and Fed officials, including Jerome Powell, have adopted a more dovish tone. This shift, combined with disappointing labor market data and a softer CPI print, triggered a wave of dollar selling earlier this month.
Key Events on the Horizon
Two critical events this week could reshape the dollar's trajectory:
FOMC Meeting Minutes (Today at 7:00 PM London Time)
These minutes offer a deeper look into the Fed's July decision-making process, revealing their views on the economy and potential policy actions. The market will closely scrutinize any clues about future rate cuts.
Jackson Hole Symposium
This annual gathering of central bankers and economists sets the stage for crucial economic discussions. Fed Chairman Jerome Powell's speech will be particularly significant, as traders eagerly await hints about the potential rate-cutting cycle in 2024.
Possible Scenarios
Dovish Powell: If Powell signals further rate cuts beyond current expectations, the dollar's decline is likely to accelerate.
Data-Dependent Powell: If Powell echoes the ECB's cautious stance, emphasizing a data-driven approach, the dollar could see a short-term bounce toward 1.1000. However, the long-term outlook remains tilted towards depreciation due to the Fed's shift in monetary policy.
Trade with Caution
While the current environment favors the euro, traders should remain vigilant. Upcoming events have the potential to spark significant volatility. Consider appropriate risk management strategies, including stop-losses, to protect your capital.
*This post is for informational and educational purposes only. It should not be considered financial or investment advice.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.