Euro Basic Forecast: Bearish
Compared to other major central banks, it is difficult to overestimate the strength of the euro, regardless of the obvious differences on the way to the ECB. True, the euro zone is very different from other single countries, but at the moment it is difficult to see the strength of the euro.
While the ECB is expected to maintain its ambiguous position on medium-term inflation and inflation, the federation has already raised expectations regarding the pace of acceleration this year. The dollar rose after Wednesday’s FOMC meeting and press conference, which was clear via the USD pair and the US dollar index (DXY). The euro has depreciated against the US dollar and is down 2 percent by 2022.
Italy’s election continues to drag on as the weekend draws to a close, with no agreement yet on who will be Italy’s next president. Despite the fact that the day-to-day voting process was not effective until the election of a new president, the shock and negotiation behind the curtain is said to have given the Italian public some degree of theater experience and attracted a large number of spectators.
Further reports indicate that on Thursday, lawmakers took some action during the nomination process. Earlier, a vote was taken in favor of the late former prime minister, Betino Craxie, who was later sidelined. In Italy, anyone can be Italian as long as he lives and as president for more than 50 years.
The elections are not expected to have a significant impact on the euro, but a long process will certainly be of no use as it will not benefit the currency.
A major Euro-event threat for next week
Overall, next week will be packed with economic data and interest rate decisions, both of which are significant and significant market volatility. On Monday, markets will get a first look Euro zone GDP for the last quarter of 2021. The forecast is very low compared to the previous figure, but considering the retail costs around Christmas, Delta and Omicron have tight limits in Q4, which must be taken into account.
Euro Zone Core Inflation According to Philip Lane, chief economist of the ECB, inflation is expected to fall 2% lower than expected in 2023 and 2024 this year. It gives a hint that it can be reached.
Finally, the ECB price decision It will take place on Thursday without any surprises. The ECB may amend its plan to end the pandemic Emergency Purchasing Program (PEPP) in March. It ሳ temporarily doubles its acquisition for Q2 by the Procurement Procurement Program (APP) before returning to 20 20 million.
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Euro / USD weekly chart
IG Client Emotions Euro Euro / USD Traders Increase Net-Longs (bear symbol).
According to data from retailers, 70.34% of net trades are traded, with the ratio ranging from long to short from 2.37 to 1.
We usually Take the opposite view of people’s emotions, And the fact that traders are net-long indicates that the EUR / USD price may continue to decline.
Why does a retail customer feel like a Opposite indicator
Net trades rose 9.6 percent yesterday and 16.87 percent last week, net-shorts traded 6.10 percent yesterday and 15.59 percent last week.