Trading opened with a depreciation of the euro
At the end of the week, the main currencies closed again in different directions. The decline was shown by the Swiss franc (-0.32%) and the Japanese yen (-0.50%). The largest growth was shown by the Australian dollar (+ 2.49%). Less growth was shown by the Canadian dollar (+ 0.88%), the New Zealand dollar (+ 0.71%), the British pound (+ 0.27%) and the euro (+ 0.09%).
On Friday, December 10, trading in the euro closed with growth. The single currency gained 0.21% to 1.1316. Friday has a bullish body with a long lower shadow. In the first half of the day, the euro rate dropped to 1.1265. Following the release of US inflation data, the euro / dollar recovered to 1.1324.
The data showed that the annual growth rate of consumer prices in the United States increased to 6.8%, which was the highest value since June 1982, after rising by 6.2% in October.
After the release of data on consumer inflation CPI, the yield on 10-year US bonds fell (negative for the dollar). Many expected a more aggressive rise in inflation, which stood at 6.8%. The market took into account high inflation in the price, therefore, a correction for major currencies began in the foreign exchange market.
Scheduled statistics (GMT +3):
OPEC's monthly report to be released at 15:00Johannes Berman of the Bundesbank will deliver a speech at 16:00The Bank of England's Financial Stability Report will be released at 20:00
Current situation:
Major currencies are trading in negative territory after Friday gains. The key events this week are the meetings of the US Federal Reserve, the ECB and the Bank of England, as well as press conferences by J. Powell and C. Lagarde.
The Fed is expected to announce a faster cut in asset purchases. The rate of decline in asset purchases is likely to double to $ 30bn a month, in line with the end of quantitative easing in March. Omicron may change the plans of the US Federal Reserve System.
Technical analysis:
At the time of this writing, the euro is worth 1.1285. The euro is correcting after rising to 1.1324. Given that today is Monday and the calendar is empty, there is a high likelihood of another decline to the level of 1.1280. The price still remains in the range of November 30 (1.1235-1.1383). Most likely, she will exit after Powell's performance on Wednesday, or Lagarde on Thursday.
If the euro sells off around 1.1280 (trending), then a recovery to 1.1345 can be considered. The market is forming a complex wave formation. The rise of the pair fits into this structure. A false breakout of the trend line is possible up to the 45th degree (1.1270).
Summary:
On Friday, trading in the euro ended with growth. The euro has risen in price against the dollar after the release of data on inflation in the United States. The data matched the forecast. After the statistics were released, the yield on 10-year US bonds fell, which negatively affected the dollar. The focus of attention remains the meeting of the US Federal Reserve and the ECB. Because of Omicron, uncertainty remains in the market, so no one knows what decision the Fed will make on the volume of QE reduction.