empty
15.04.2024 05:00 PM
The dollar has not reached its potential

What is permissible for Jupiter may not be permissible for a bull. In the updated forecasts of Wall Street Journal experts, the figure of 2.2% for the U.S. GDP in 2024 is mentioned. European Central Bank specialists surveyed believe that the eurozone economy will expand by 0.5% this year. American domestic demand is much stronger than European, creating conditions for accelerating inflation and forcing the Fed to keep rates plateaued for a long period. This is all the better for the bears on EUR/USD.

Economists at the Wall Street Journal have reduced the chances of a recession in the U.S. from 39% in the January survey to 29%. This is the lowest level since April 2022. They expect the Fed to cut the federal funds rate three times this year, and inflation in the form of the Personal Consumption Expenditures Index to reach 2.5% by the end of 2024.

Dynamics of the probability of recession in the U.S. economy

This image is no longer relevant

Meanwhile, after the release of consumer price data in the States, FOMC officials began to backtrack on their March plans. For instance, Federal Reserve Bank of Boston President, Susan Collins, believes the federal funds rate will only be cut twice in 2024. Her colleague from the San Francisco Fed, Mary Daly, sees no urgency in easing monetary policy and asserts that the Fed still has a lot of work ahead.

American exceptionalism, the persistence of holding borrowing costs at 5.5%, and loose fiscal policy in the U.S. are the main components of the dollar's success recipe. It leads the currency race among the Big Ten, and there are no signs of a change in leadership.

It should be noted that the drop in EUR/USD to its lowest levels since early November was driven not only by the different pace of monetary expansion by the Fed and the ECB but also by geopolitics. By the end of the working week on April 12, markets were preparing for an Iranian airstrike on Israel, speculating on how much oil would rise in such a scenario, and buying safe-haven assets, including the U.S. dollar.

However, in reality, the devil turned out to be not as black as he was painted. 99% of missiles and drones were shot down, and no one was hurt. As a result, Brent plummeted below $90 per barrel, and bears on EUR/USD closed part of their positions. This led to a retreat in the main currency pair. However, at the same time, the yield on U.S. Treasury bonds rose, strengthening the position of the U.S. dollar.

Dynamics of U.S. Treasury Yields

This image is no longer relevant

This image is no longer relevant

Currently, the spread between U.S. and German debt market rates is at its highest levels since 2019, indicating the stability of the downward trend in EUR/USD. The downward movement of the main currency pair is based on a solid foundation, so pullbacks should be used for selling.

Technically, on the daily chart, EUR/USD has seen a rebound from the area of 5-month lows. However, the target at 161.8% according to the AB=CD pattern has not been canceled and is located at the 1.05 mark. It makes no sense to refuse to sell the euro against the U.S. dollar. Previous strategies of forming shorts on pullbacks remain relevant.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

Donald Trump volvió a confundir a todos

Ayer, el presidente de EE.UU., Donald Trump, declaró que planea una serie de excepciones a su amplia propuesta de aranceles, lo que se convirtió en la última insinuación velada sobre

Jakub Novak 08:45 2025-03-26 UTC+2

El jefe del Banco de Inglaterra contra los aranceles y a favor del desarrollo de la IA

La intervención de ayer del gobernador del Banco de Inglaterra, Andrew Bailey, solo abordó parcialmente la economía del Reino Unido y sus perspectivas. Hablando durante una conferencia en la Universidad

Jakub Novak 08:17 2025-03-25 UTC+2

GBP/USD. Una semana importante para la libra

La libra espera acontecimientos importantes y significativos. El miércoles se publicará el informe clave sobre el crecimiento de la inflación en el Reino Unido, así como la intervención

Irina Manzenko 12:22 2025-03-24 UTC+2

El ataque a la estación de medición de gas Sudzha solo provocó un aumento temporal de los precios

Los precios del gas natural en Europa registraron un fuerte repunte debido a un ataque contra una estación de bombeo inactiva en la región de Kursk, Rusia. Según

Miroslaw Bawulski 10:29 2025-03-24 UTC+2

Los mercados atrapados en un círculo vicioso sin salida por ahora (posible caída del Bitcoin y del precio del oro)

Los mercados están en estado de confusión debido a la enorme cantidad de noticias negativas que se ciernen sobre ellos sin un final claro a la vista. En este contexto

Pati Gani 11:13 2025-03-20 UTC+2

Análisis del par GBP/USD. El 17 de marzo. El mercado se ha dormido, la economía no le interesa a nadie.

El par de divisas GBP/USD el viernes "murió" definitivamente. En la ilustración a continuación se puede ver claramente que la volatilidad fue bastante alta en los primeros tres días

Paolo Greco 07:03 2025-03-17 UTC+2

Análisis del par EUR/USD. 17 de marzo. Ni rastro de corrección.

El par de divisas EUR/USD no logró continuar el débil movimiento a la baja del miércoles y jueves durante la jornada del viernes. Por lo tanto, una corrección contra

Paolo Greco 07:02 2025-03-17 UTC+2

El Bitcoin huye de la criptocapital del mundo

Donald Trump prometió hacer de América la criptocapital del mundo, pero ¿quién necesita una capital de la que todos huyen? Las peores liquidaciones de empresas tecnológicas desde 2022 entristecieron

Marek Petkovich 12:02 2025-03-11 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el 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.