The last session of the week in terms of macro-economic calendar promises to be quite quiet – in the middle of it there will be several important publications from the Old Continent, as well as from the other side of the ocean. Enjoy morning market overview showing, among other things forecasts for EUR/USD in medium term.
Fed rate hike in March?
Analysts at Westpac latest market recommendations draw attention to the recent speech of Janet Yellen before Congress and strong macroeconomic data from the US, which clearly increased the chance of a rate hike already on March 15 at the next meeting of the Federal Reserve. EUR/USD that day may come under heavy pressure as this is also the moment of the parliamentary elections in the Netherlands.
Westpac valued the opportunity of the March increase up to 45% – if the scenario will occur, then the EUR/USD should aim again towards 1.04, and in period of three months (which according to analysts of the bank certainly there will be a change in interest rates) Eurodollar will reach 1.02.
If this scenario will not happen and the pair will continue strengthening in January, then the correction may extend up to 1.10. It is true that the area of 800 pips does not tell us too much, and certainly its not not a comfortable consolidation, in our opinion, in the medium term we should much more focus on the south direction:
As you can see in the chart below EURUSD for 50% of the abolition of the post-election depreciation and level of 1.0800 draw a clear zone of resistance, which has not yet managed to overcome. Correction of this week so far is an ordinary rebound at the height of the next Fibonacci level (23.6%). Re-approach to 1.0800 or even before 1.0708 (38.2% Fibo) will be an opportunity to seek short-enters on market:
Data from the Poland on background of international events – what to look for?
European macroeconomic calendar opens UK publishing at 10:30 data on retail sales – are projected to rebound retail sales m/o/m with negative levels, which certainly in the short term will strengthen the GBP. Then at 14:00 there will be publications from Poland on the same indicator.
It is true that at the start of the US session we can distinguish a lot of publications, but the most important will be from Canada showing purchases of foreign securities.