empty
18.11.2024 07:45 AM
EUR/USD Weekly Results: Trump's Appointments, Powell's Hawkish Stance, and Accelerating U.S. Inflation

Looking at the monthly chart, EUR/USD has formed two bearish candles. In October, the pair dropped by 250 pips, and in just two weeks of November, it had already fallen by almost 400 pips (opening price: 1.0883, current low: 1.0494). Notably, after the U.S. presidential election results, EUR/USD buyers managed a brief, nearly 100-pip correction, but last week saw the pair decline almost uninterruptedly. By Friday, the price paused and slightly corrected due to the "Friday effect," as market participants refrained from breaching the 1.0400 level ahead of the weekend. Consequently, the Friday candle on the D1 chart turned bullish. However, bearish sentiment continues to dominate, pointing toward the 1.0450 support level (the Kijun-sen line on the MN timeframe).

This image is no longer relevant

The driving force behind EUR/USD remains Donald Trump and his anticipated "Trumpnomics." This is the cornerstone of market developments, with all other factors deriving from it.

The week before last, the market reacted to Trump's election victory. Last week, as emotions subsided, the focus shifted to Trump's (who will take office on January 20 next year) first personnel decisions, which signaled impending tensions with China and other trade partners.

The so-called "Florida Hawks" will occupy key positions in the White House: Marco Rubio as Secretary of State (comparable to the Minister of Foreign Affairs) and Mike Waltz as National Security Advisor (the most influential position in the hierarchy of American power). Both hold aggressive stances toward China: Marco Rubio supported the Hong Kong protests four years ago and described China as "the most formidable and dangerous adversary the U.S. has ever faced."

The other "Florida Hawk" (they both represent the state of Florida), Mike Waltz, views the U.S. as still in a Cold War with China. He championed legislation reducing the U.S. dependence on China for critical minerals and called for a full boycott of the 2022 Beijing Winter Olympics.

These appointments indicate that Trump plans to adopt an aggressive stance toward China, with Rubio and Waltz likely spearheading this policy.

China, in turn, has signaled readiness for confrontation. According to the Financial Times, Chinese authorities have prepared countermeasures, including sanctions, blacklisting foreign companies, and restricting U.S. access to critical supply chains.

This escalation puts Washington and Beijing on the brink of a trade war, with potential "battle" lines drawn for early next year.

The trade war's most immediate consequence will likely accelerate U.S. inflation. As tensions mount, market speculation about the Federal Reserve pausing rate cuts in 2024 has intensified, further fueled by Powell's comments last week.

Such assumptions began to sound more confident after the speech of the Fed head, Jerome Powell, who said on Thursday that the Fed should not rush to lower the interest rate. This hawkish signal took market participants by surprise since just last week, at a press conference following the November meeting, he stated without any remarks that the central bank would continue to soften monetary policy.

Recent CPI and PPI data supported Powell's stance, reflecting the acceleration of inflation in the US. The headline CPI rose to 2.6% YoY in October, marking the first acceleration since March after a six-month consecutive decline. Meanwhile, the core CPI remained steady at 3.3% YoY.

The PPI index complemented the CPI – all report components were in the green zone. For example, the general producer price index rose in October to 2.4% year-on-year after falling to 1.9% in September (with a forecast of 2.3%). The core PPI also exceeded experts' expectations. With a forecast of growth of 3.0%, it increased to 3.1%. This indicator has been demonstrating a consistent upward trend for the third month in a row.

Following such a busy week, the market has revised its expectations for the Fed's next moves. The probability of the Fed maintaining the current rate in December rose to 40%, up from just 14–16% earlier in the week (CME FedWatch Tool).

The fundamental landscape strongly favors the continuation of the bearish trend in EUR/USD. The euro will obediently follow the greenback, which feels quite confident against the backdrop of Trump's personnel decisions, accelerating inflation in the US and strengthening hawkish sentiments in the market. The nearest target of the downward movement is 1.0500 (the lower line of the Bollinger Bands indicator on the four-hour chart), and the main target is 1.0450 (the Kijun-sen line on the MN timeframe).

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

USD/JPY. La inflación en Tokio se acelera, pero el yen sigue siendo vulnerable

El informe publicado hoy sobre el crecimiento de la inflación en la capital de Japón resultó estar en la "zona verde". La publicación permitió a los vendedores del par usd/jpy

Irina Manzenko 12:25 2025-03-28 UTC+2

Análisis del par GBP/USD. El 28 de marzo. La libra no tuvo tiempo de caer, pero volvió a subir.

El par de divisas GBP/USD volvió a cotizarse al alza el jueves, aunque hace unos días comenzó una especie de corrección bajista. El mercado incluso reaccionó a un informe débil

Paolo Greco 07:24 2025-03-28 UTC+2

Análisis del par EUR/USD. 28 de marzo. A Donald Trump le gusta hacer sorpresas.

El par de divisas EUR/USD mantuvo una inclinación bajista durante el jueves, pero se negoció al alza durante el día. La volatilidad volvió a ser baja, lo que indica

Paolo Greco 07:24 2025-03-28 UTC+2

USD/JPY. El yen se devalua a la espera del informe sobre el crecimiento del TCPI

El par usd/jpy mantiene el potencial de un mayor crecimiento. El informe sobre el crecimiento del TCPI, que se publicará el viernes, o bien reforzará la tendencia alcista, o provocará

Irina Manzenko 12:13 2025-03-27 UTC+2

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
¿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.