Despite an Upbeat Italian budget optimism, Euro leaning back on to the 1.1200s
- The American Dollar has re-claimed gain over 97.00 on the DXY chart, aided by waves of EUR and GBP weakness
- Despite Italy agreeing to cut its deficit target, EUR keep tumbling
- This Week’s economic calendar is busy and tomorrow would bring some comments from the FOMC chairman Jerome Powel, who is likely to hold on to USD’s current path of rate hike
- Possibility of rate hike lingering is looming large, as Donald Trump criticized the hawkish tone set by FOMC
Today’s market has been filled stabbed EURO and GBP, as Trump commented that the recent Brexit proposal would hamper US-UK relationship. Since the comment has been made, the Euro keeps falling, despite Italy agreed to cut its budget deficit at last.
A report earlier this morning indicated that the Italy was set to cut its planned budget deficit, as EU instructed, followed by a threat from the EU officials of an Italy sanction. However, up to this point, the Italian government had been unable to agree upon the decreased deficit target, as Euro sell-off is taking control over the market. While this report is being written, Euro has been dragged downward to 1.1288, as GBP plunged in to 1.2743. On the flipside of the coin, the USD has been on the verge of retesting the 97.00s again.
EUR/USD daily price chart
The EUR/USD daily price chart has indicated that further downfall might have been in the store, while market sentiment is souring and market remains tense over the Brexit saga, trade wars and Euro zone political turmoil.
GBP/USD hourly price chart
Additionally, GBP/USD pair had been snapped hard, as President Donald Trump commented that the recent Brexit agreement might hamper future US-UK relationship. In the light of this recent concern, both GBP and EUR have been dipping sharply, jigged in to their rabbit holes, though market remains highly tense and cautious, as GBP and EUR had already broken their key support zones and any bullish optimism is highly unlikely, unless, UK PM Theresa May converts some of her Brexit opponents, prodding a pause into this severe downtrend.
Fair and square, the USD bull run appears to be continued, however, the upcoming comment from FOMC chairman Jerome Powel would be pivotal to set its recent course. Italy is more likely to come up with a budget proposal, which lacks budget deficits. Until tomorrow, the USD upsurge is highly likely to continue, however, the market could observe a rapid flip-flop tomorrow, as FOMC chairman could follow Trump’s lead of neutralizing the hawkish FED bias and a news of Italy’s newly revised budget proposal (the fourth revision) might propel the Euro forward.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]