Rebound of the EUR/USD and the rate hike goes far away

The EUR/USD cross at the moment is experimenting an important rebound from a significant support at 1,1102/1,1058 during Friday after disappointing NFP data. With the pair which is trading at the moment at 1,1340 tracing a negative performance of 0,23%, we can see the next significant resistance at 1,1420 (exactly the center of the channel from here and the April 2016 high at 1,1495). On the negative side, in case the loss will extend, the next support is seen at 1,1216 (25 April low) after which the pair could go next to the 200-day moving average at  1,1102.

EUR:USD 6Jun

With a decreased occupation to 1,7% YoY (which would increase the Q2 productivity data), also the unemployment rate has decreased compatibly with the downside move of the labour force. The initial part of the year, moreover, have seen the participation rate increase, with a lower number of people leaving the labour force, and the GDP which is still on track for the 2% level in Q2 (even if it seems to have lost the initial momentum). Besides those disappointing data, the major concern is the revision of the expectations for the labour market: this will certainly cause a Fed’s reaction, which seems to have removed from the table the possibility of an hike for  the current month.

Yellen this afternoon’s speech will be pretty balanced, after the lately cautiousness seen in topic of monetary policy. I’m waiting for a rhetoric against a rate hike for the near term, but, as often happens, the Fed’s chair could repeat that

“a rate hike during next months would be appropriate”

This could mean a reinforcement of the vision by which the Fed could intervene in September, with a more clear situation of growth, inflation, labour market and global risk.

janetyellen

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s