empty
14.06.2018 11:00 AM
Global macro overview for 14/06/2018

Not that long ago global investors thought that the risks to the Euro before the meeting outweighed the negative side, because they assumed, that the currency could strengthen based on the expectations of the hawkish result of the meeting, while the tone of decisions and conferences may be less aggressive or result in "sale the facts" behaviour. Nevertheless, the next few days brought stabilization, if not even cooling the demand for EUR, which made investors' attitude return into balance. But the rebound of the EUR/USD after the yesterday's Fed's decision prompts to conclude, that the market is again setting up on a hawkish ECB message. There is a potential for a positive reaction to the decision of the ECB regardless of whether the traders will know the specific details of extending the QE, or the decision will be postponed until July and today we will have to rely on Draghi's suggestions. In the latter case, a lot will depend on how optimistic Draghi will be about the prospects of accelerating the recovery in the Eurozone and return of inflation to the target levels while reducing the importance of internal risks (like uncertainty in Italy, deterioration in economic data, etc.) and external (like US trade policy and tariffs tax ). However, if the ECB shows that it remains at a previously set exchange rate, it may offer investors confidence in building expectations of a progressive normalization of monetary policy, which will be an important pillar of the long-term EUR power.

Let's now take a look at the EUR/USD technical picture at the H4 timeframe, before the ECB interest rate decision was made. The price has bounced higher after the Fed interest rate hike yesterday and now the market is approaching the swing high at the level of 1.1839. An interest rate hike by ECB or Draghi hawkish remarks will make EUR/USD to rally way higher than this level. In this case, the first target would be at the level of 1.1994 (practically round number 1.2000), but in that case, I think it might get extended even to the level of 1.2068 easily. If, however, the ECB will leave the rate unchanged or the Draghi remarks will not be as hawkish as expected, the EUR/USD will likely test the 38% Fibo at 1.1852 and stop there to consolidate the gains.

This image is no longer relevant

Summary
Urgency
Analytic
Sebastian Seliga
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

XAU/USD. Analysis and Forecast. Gold is supported by moderate USD weakness and trade-related uncertainty

Today, gold is trading higher, remaining within a sideways trend. Late Thursday, Federal Reserve official Christopher Waller stated that rising risks to the economy could justify a key rate

Irina Yanina 19:15 2025-07-18 UTC+2

AUD/USD. Analysis and Forecast

Today, the AUD/USD pair climbed above the key psychological level of 0.6500, attempting to confirm its recent positive momentum. The main driver behind the Aussie's rise is the weakening

Irina Yanina 13:49 2025-07-18 UTC+2

USD/CAD. Analysis and Forecast

Today, Friday, the USD/CAD pair is pulling back from a three-week high near 1.3775 recorded yesterday. At the moment, prices are trading slightly below the 1.3730 level, showing a modest

Irina Yanina 13:38 2025-07-18 UTC+2

The European Central Bank May Postpone Its Rate Cut Until December

While the euro attempts to stage a correction against the U.S. dollar, a survey of economists suggests that the European Central Bank may delay its final interest rate cut until

Jakub Novak 11:37 2025-07-18 UTC+2

Powell Responds to White House Criticism

Lately, Federal Reserve Chair Jerome Powell has faced increasing pressure, coming under fire from lawmakers, the White House, and U.S. President Donald Trump. In a letter sent on Thursday, Powell

Jakub Novak 11:26 2025-07-18 UTC+2

The U.S. Begins Regulating the Digital Currency Market (Potential for a Correction in Bitcoin and EUR/USD)

The U.S. House of Representatives has passed bills establishing the first federal framework for dollar-backed stablecoins and setting regulations for other digital currencies. The idea of regulating the cryptocurrency market

Pati Gani 09:28 2025-07-18 UTC+2

The Market Favors a Weak Dollar

What could be better for the S&P 500 than a Federal Reserve rate cut amid a still-strong economy? A series of positive labor market and retail sales data, combined with

Marek Petkovich 09:28 2025-07-18 UTC+2

What to Pay Attention to on July 18? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are scheduled for release on Friday, but none of them are of major importance. The only noteworthy release is the University of Michigan Consumer Sentiment Index

Paolo Greco 06:13 2025-07-18 UTC+2

GBP/USD Overview – July 18: Is the Market Tired of the Dollar and Trump?

The GBP/USD currency pair once again leaned toward decline on Thursday. After the British pound strengthened on Wednesday evening following another report about Powell's dismissal, the dollar quickly recovered. However

Paolo Greco 03:56 2025-07-18 UTC+2

EUR/USD Overview – July 18: Trump Will Keep Trying to Fire Powell for Another Year

The EUR/USD currency pair continued its steady decline throughout Thursday. As a reminder, the forex market experienced an "explosion" on Wednesday evening. Donald Trump once again attempted to either fire

Paolo Greco 03:56 2025-07-18 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.