Minutes of the most recent Federal Open Market Committee meeting published on Wednesday showed that successful attempts have been made towards the apex bank’s double vision of price stability and employment. Keeping in mind that the economy is in danger, there are reasons to speculate that the Fed will soon enough declare a tapering of its bond-buying.
The Jackson Hole Symposium, spanning 3 days (August 26-28) will give room for Powell to declare an adjustment in Fed’s line of thought, while the September FOMC meeting, with the most recent Summary of Economic Projections, is currently seen as a live occasion where a tightening declaration is starting to be heated in.
US Dollar Achieves Five-month High
The resulting run in the US dollar to an almost five-month high has seen EUR/USD settle under a solid support zone around 1.1700 and crumble to regions last seen toward the beginning of November 2020. March 2021’s low at 1.1704 and the 38.2% Fibonacci retracement level only beneath at 1.1695 both fell in Asian turnover, leaving the November 4, 2020 low print at 1.1603 weak.
EURO (EUR/USD) DAILY PRICE CHART AUGUST 19, 2021
Market brokers report reveals that 64.10% of investors are net-long with the proportion of investors long to short at 1.79 to 1. Percentage of net-long traders is at 7.03%, lower than yesterday’s and 15.73% lower from last week. In contrast, the percentage of net-short traders is 5.13%, higher than yesterday’s and 4.54% higher from the previous week.
Traders’ sentiment can also be misleading, as such taking an antagonistic view is not a bad idea. EUR/USD costs might proceed to a fall since traders are now net-long. The number of traders net-long on Thursday pales in cryptocurrencies yesterday and last week. Notwithstanding traders being net long, recent shifts in sentiment are strong indications that EUR/USD price trend may soon correct to the top. According to available data, 59% of traders are net-long.
EUR/USD Fails To Defend March Low
EUR/USD offers a bullish response to the published minutes Federal Open Market Committee (FOMC) on the premise of US Dollar strength. Predictions for an approaching change in Fed policy may likely keep the exchange rate under tension as the European Central Bank (ECB) gives off an impression of being on a preset course.
Some remarks propose the ECB will adhere to a similar agenda at its next interest rate session on September 9 as the apex bank prepares for a temporary leap in inflation, and the dividing views on monetary policy might keep EUR/USD under tension as a significant number of Federal Reserve officials are willing to change their views. EUR/USD will be pushed to new yearly lows in view of wagers for an impending policy change by Fed if further the 2021 range is not defended.
