Get started

EURSGD

"EUR/USD Stabilizes After Testing 15-Week High Near 1.1000" The EUR/USD exchange rate is retracing back towards the vicinity of 1.0980 after touching a 15-week high just above 1.1000, supported by an increase in risk appetite across the broader market, causing the US Dollar to depreciate and fall into the red against all major currencies on Tuesday. The daily chart depicts EUR/USD trading around the opening level, despite reaching a weekly high. The pair is still attempting to surpass the 61.8% Fibonacci retracement level of the decline from 1.1275 to 1.0447 at 1.0960, although the overall picture remains bullish. The 20-day Simple Moving Average (SMA) is crossing above the flat 100-day SMA and is on the verge of crossing the undirected 200-day SMA, all within the range of 1.0790/1.0810. Meanwhile, technical indicators remain positive, although lacking directional strength. The 4-hour chart reveals buyers defending the downside trend around the slightly ascending 20-day SMA, currently at 1.0930. The longer-term moving averages maintain their upward slopes, significantly lower than the shorter-term averages, indicating buyer control. Lastly, technical indicators have lost directional strength but still remain higher than the midline, reflecting a lack of selling pressure. Support levels: 1.0930, 1.0895, 1.0860 Resistance levels: 1.0960, 1.1005, 1.1045
by Larissa-Trader
"EUR/USD: Challenges Below 1.0950"The EUR/USD pair experiences modest losses in the early Asian trading session on Monday. Increased demand for the U.S. Dollar has pushed the major currency pair lower. The potential upside for the EUR seems limited due to macroeconomic prospects. The pair is trading near the 1.0935 level, down 0.08% on the day. EUR/USD continues to trade in the upper half of the ascending regression channel, with the Relative Strength Index (RSI) holding just above 50, indicating a lack of selling interest. The 1.0950 level (61.8% Fibonacci retracement of the downtrend from July to October) is considered a strong resistance before 1.1000 (psychological level, static level), and 1.1025 (static level from August). On the flip side, support levels are located at 1.0900 (50-period Simple Moving Average (SMA), psychological level), 1.0850 (50% Fibonacci retracement level), and 1.0800 (100-period SMA, lower limit of the ascending channel). EUR/USD closed the second consecutive session in negative territory on Thursday but attempted to stabilize above the 1.0900 level on Friday. S&P Global will release Manufacturing and Services PMI data for the U.S. at the end of the day, but thin trading conditions on Black Friday may limit the pair's actions before the weekend. Data from Germany shows that the IFO Business Climate Index, Germany's leading indicator, improved to 87.3 in November from 86.9 in October. The Current Assessment Index increased to 89.4 from 89.2, while the Expectations Index rose to 85.2 from 84.8. Although these figures are slightly lower than analyst estimates, they have little impact on the Euro's valuation. Meanwhile, in an interview with Boersen-Zeitung on Thursday, European Central Bank policy maker Pierre Wunsch called the market pricing for interest rate cuts "very optimistic" and argued that this stance could increase the likelihood of further tightening. Business activity for private sectors in the U.S. is forecasted to slow down in November. In the event of disappointing PMI results, the U.S. Dollar (USD) may struggle to sustain its recovery against its counterparts in the U.S. trading session.
by Larissa-Trader
Global Economic Analysis: Potential Recession in the EurozoneEurope The S&P Global Purchasing Managers' Index fell to 47.1 in November, marking the sixth consecutive month below the 50-point expansion threshold, despite exceeding economists' predictions. Both manufacturing and services sectors reflect a similar trend. Germany will suspend constitutional limits on net new borrowing for the fourth consecutive year after Prime Minister Olaf Scholz's government was compelled to implement sweeping budget reforms following a recent ruling by the national supreme court. This emergency move to lift the so-called "debt brake" will be part of the 2023 budget revision, expected to be presented by Finance Minister Christian Lindner next week. Asia China may have concluded its interest rate cuts as policymakers shift towards alternative measures to support the economy and maintain credit growth stability in the new year. Initial trade data from South Korea indicates that exports are likely to sustain growth momentum this month, continuing the recovery after a year-long recession. South Korea, a crucial global exporter, plays a significant role as an indicator of the global economic condition through its export performance. Emerging Markets Thailand's economic growth unexpectedly slowed in Q3 due to a decline in manufacturing caused by weak exports, supporting the new government's $14 billion cash support program as planned. Chile's economy expanded more than forecasted in Q3, driven by the mining sector, as the central bank began to ease monetary policy. Gross domestic product increased by 0.6% from July to September compared to the same period last year. In the prolonged interest rate decisions across Africa, the region's largest economies are expected to maintain higher interest rates for an extended period. Angola and Zambia raised rates this week to curb persistent inflation and stabilize their currencies, with Nigeria also planning an interest rate hike. South Africa maintains the current rate, and other countries including Morocco, Kenya, and Ghana are likely to follow suit.
by Larissa-Trader
EURSGD - Making a Complete 180Similar structure to the AUDSGD trade idea I just published, but I have a few more points to add here. I was originally short this pair. I attempted to make another attempt to enter short and ended up taking out a loss. Since price broke to the upside of this range, my directional bias has changed from bearish to bullish. Momentum picked up nearing last Friday's close and the moving average crossover is an indication of potential price acceleration for the week ahead.
Long
by FinancialGamblR
EUR/USD Maintains Slight Decline Below 1.0900 The EUR/USD exchange rate continues its descent after failing to hold above 1.0950. On Wednesday, the pair encountered resistance at 1.0920 before experiencing another round of price depreciation. Finding support at 1.0850, the potential for further downside exists, targeting the crucial support level at 1.0830. The short-term downtrend line is positioned at 1.0900, and a move above this level could provide momentum for the Euro. On the 4-hour chart, technical indicators suggest a continued bearish trend but lack strong conviction. The MACD indicator signals bearish tendencies, while the Relative Strength Index (RSI) moves laterally, indicating potential consolidation in the range of 1.0890 to 1.0860 or around the 1.0830 region. A drop below the subsequent level would increase downward pressure, leading to additional losses for the Euro. The EUR/USD rate retreated on Wednesday to the 1.0850 area, driven by a stronger US Dollar following the release of US economic data. This pair continues to pull back from monthly highs in a corrective move. Bundesbank President Joachim Nagel stated on Wednesday that interest rates in the Eurozone are nearing their peak. Market participants believe that interest rates are unlikely to increase further unless inflation recovers. Key data will be released on Thursday, including preliminary PMI indices for November. Forecasts suggest further improvements, but all figures are expected to remain below 50. This data could impact the market, and any negative surprises may add pressure to the current adjustment in EUR/USD. The Flash Services PMI is expected to rise from 47.8 to 48.0, and Manufacturing from 43.1 to 43.3. Also on Thursday, the European Central Bank (ECB) will release the minutes of its latest monetary policy meeting. The US Dollar has further recovered from monthly lows, gaining momentum after the release of mixed US data showing a larger-than-expected decrease in initial jobless claims and a significant drop in durable goods orders. The US market will be closed on Thursday. Bond yields continue to rise, supporting the ongoing adjustment of the US Dollar. Market sentiment seems poised for a consolidation ahead.
by Larissa-Trader
1
EUR/USD Holds Near 3-Month Highs, Driven by Market ExpectationsThe EUR/USD pair enters a consolidation phase during Tuesday's Asian trading, hovering just below the key level of 1.0900, marking the highest point since August 14th. The pair has seen consecutive gains, surpassing 1.0900, with the upward trend sustained above crucial daily Simple Moving Averages. However, the Relative Strength Index (RSI) above 70 signals overbought conditions. On the 4-hour chart, overbought conditions persist, but no significant correction signs are evident. Further upside potential remains as long as prices stay above 1,0885. In case of a pullback, the next support level to watch is at 1,0830. On the upside, immediate resistance is around 1,0965, with a break aiming for 1,0990. The US Dollar extended its decline on Monday, propelling the EUR/USD to a three-month high near 1.0950. The prevailing market expectation that the Federal Reserve (Fed) has completed interest rate hikes continues to weigh on the US Dollar, driven by stock market gains on Wall Street. The Dollar Index (DXY) dropped 0.35% to 103.45, the lowest since August. Market optimism regarding the Fed's rate hike completion, coupled with Wall Street's equity rally, maintains the upward bias for EUR/USD. The Dollar is still vulnerable as the Dollar Index seeks support. On Tuesday, the Fed will release the latest FOMC meeting minutes. In terms of US data, the Fed Chicago National Activity Index and Existing Home Sales are scheduled. In Europe, the upcoming crucial report will be the preliminary PMI for November, set to be released on Thursday. As long as the risk-on environment prevails, the EUR/USD pair has the potential for further gains. However, considering the superior economic performance of the US compared to the Eurozone, fundamental factors continue to support the US Dollar.
by Larissa-Trader
1
EUR/USD Holds Near 3-Month Highs, Approaching 1.0950"The EUR/USD exchange rate has risen for the second consecutive day, surpassing the 1.0900 level. The upward trend remains intact as prices are holding above significant Simple Moving Averages on the daily chart. However, the Relative Strength Index (RSI) above 70 indicates overbought conditions. On the 4-hour chart, overbought conditions persist, but there are currently no signs of a major correction. Further upside potential exists as long as prices stay above 1.0885. If a pullback occurs, the next support level to watch is 1,0830. On the upside, immediate resistance is around 1.0965, and a higher breakout aims for the 1.0990 level. The US Dollar extended its decline on Monday, pushing the EUR/USD rate to a three-month high near 1.0950. The bias continues to favor the upside as the US Dollar remains vulnerable. Market expectations that the Federal Reserve (Fed) has completed its interest rate hikes continue to weigh on the US Dollar, and it is further fueled by stock market gains on Wall Street. The US Dollar Index (DXY) fell 0.35% to 103.45, its lowest since August. The greenback is still seeking support. On Tuesday, the Federal Reserve will release the latest FOMC meeting minutes. In terms of US data, the Fed's National Activity Index and Existing Home Sales are on the schedule. In Europe, the upcoming key report will be the preliminary PMI for November, scheduled for Thursday. As long as the risk-on environment persists, the EUR/USD pair has the potential for further gains. However, considering the superior economic performance of the US compared to the Eurozone, fundamental factors still support the US Dollar.
by Gwen_Humuna
1
EUR/USD Analysis: Exploring Upward MomentumThe euro has exhibited a week-long uptrend, testing the previously established ascending trendline as a significant resistance level. The 1.09 mark stands out as a substantial barrier, and if successfully surpassed, the market may set its sights on the 1.10 level. Beyond that point, there is potential for the market to extend its upward trajectory. On the downside, multiple support levels exist near the 200-week EMA, particularly around the 1.0720 mark. As the euro charts its course, traders are closely monitoring these key levels, anticipating potential breakthroughs or pullbacks. The dynamics of the currency pair suggest a nuanced interplay of market forces, creating a landscape ripe for strategic analysis and decision-making.
by Larissa-Trader
EUR/USD Extends Upside Momentum Above 1.0700The EUR/USD pair rose to 1.0700 in the early Asian trading session on Tuesday. Lower US Treasury bond yields are exerting pressure on the US Dollar (USD), providing some support for this currency pair. However, concerns about economic downturn in the Eurozone may limit the Euro's upward trajectory. The EUR/USD exchange rate has increased for the second consecutive day and is holding above the 20-day and 55-day Simple Moving Averages (SMAs). Technical indicators on the daily chart suggest a modest bullish trend. However, closing below 1.0615 would negate positive prospects. On the 4-hour chart, the pair is testing the short-term downtrend line around 1,0705, while staying above the support zone at 1,0655. Technical indicators are not providing clear signals. A breakout above 1,0710 would open up opportunities for further strength, with subsequent targets at 1,0735 and then the previous high near 1,0760. On the other hand, an acceleration of the downside may occur if the pair breaks below 1,0650, initially targeting 1,0635 and then 1,0610.
by Larissa-Trader
1
EUR/USD Maintains Modest Gains Near 1.0700"EUR/USD is holding slight gains near the 1.0700 mark in European trading on Monday. The US dollar started the new week on a defensive note, despite higher US bond yields. Traders are awaiting GDP data for the Eurozone and US inflation figures later in the week. The Relative Strength Index (RSI) on the 4-hour chart has dipped below 50, while EUR/USD falls below the midpoint of the upward regression channel, indicating a short-term bearish outlook. If EUR/USD fails to stabilize above 1.0680 (midpoint of the upward channel), sellers may remain active. In this scenario, the 50-period Simple Moving Average (SMA) adjusts as temporary support at 1.0660, followed by 1.0640 (38.2% Fibonacci retracement of the latest downtrend) and 1.0620 (lower limit of the upward channel, SMA 100). On the upside, resistance levels lie at 1.0700 (50% Fibonacci retracement), 1.0730 (upper limit of the upward channel), and 1.0750 (61.8% Fibonacci retracement).
by Gwen_Humuna
1
EUR/USD Maintains Position Below 1.0700The EUR/USD pair kicked off the new week on a positive note during the early Monday trading hours in Asia. The recovery of this currency pair is supported by the prevailing weakness of the US Dollar (USD). Having bounced from last week's low of 1.0656, the pair remains constrained below the resistance level of 1.0700. Currently, the main currency pair is trading around 1.0690, marking a 0.04% increase for the day. The University of Michigan Consumer Sentiment Index declined to 60.4 in November from 63.8 in October. The 12-month inflation expectations for the US increased to 4.4% from 4.2%, while the 5-year expectations rose to 3.2% from 3.0%. A crucial upcoming event is the release of the CPI report for October. A better-than-expected outcome from this report could heighten the probability of the Fed raising interest rates again in December. Last week, Federal Reserve Chair Jerome Powell mentioned that if further policy tightening is deemed appropriate, the central bank would not hesitate to do so. On the other hand, the European Commission will release its economic growth forecast on Monday, with downward adjustments expected for the 2024 growth outlook. Preliminary GDP data for the Eurozone for Q3 is also due, with a quarterly estimate of a 0.1% decrease and an anticipated 0.1% increase on a yearly basis. Additionally, some ECB figures, including Lagarde, De Guindos, Lane, and Villeroy, may reiterate that any discussions about interest rate cuts are premature. The International Monetary Fund stated last week that rapidly rising wages in the euro area could lead to prolonged inflation, suggesting that the European Central Bank should maintain interest rates at or around record highs in the coming year to alleviate pressure on prices. However, the market anticipates a rate cut, possibly as early as April, with a total of 90 basis points of cuts priced in by the end of next year. What are your thoughts on this currency pair?
by Larissa-Trader
2
EUR/USD Under Pressure Post-Disappointing US Data"EUR/USD struggles to find direction on Friday, hovering within a narrow range just below 1.0700. US Consumer Sentiment, falling to 60.4 in November from October's 63.8, adds pressure. Wall Street trades in the red after Thursday's decline, impacting USD demand. The Relative Strength Index (RSI) on the 4-hour chart drops below 50 as EUR/USD slips below the midpoint of the upward regression channel, indicating short-term downside prospects. If EUR/USD fails to stabilize above 1.0680 (midpoint of the upward channel), sellers may remain active. In this scenario, the 50-period Simple Moving Average (SMA) adjusts as temporary support at 1.0660, followed by 1.0640 (38.2% Fibonacci retracement of the latest downtrend) and 1.0620 (lower limit of the upward channel, SMA 100). On the upside, resistance levels lie at 1.0700 (50% Fibonacci retracement), 1.0730 (upper limit of the upward channel), and 1.0750 (61.8% Fibonacci retracement).
by Gwen_Humuna
1
EUR/USD Could Rise Back Towards 1.0650/1.0675"Despite negative data from the Eurozone (weaker growth and confidence, lower inflation), the calm Dollar environment warns that EUR/USD could rise again. The range of 1.0520 to 1.0700 appears to be the new short-term range, and EUR/USD might climb towards 1.0650/1.0675, possibly triggered by the US unemployment claims announcement. The data calendar is light, but attention is on the speech by ECB Chief Economist Philip Lane. We anticipate he may hint at another rate hike in December, although the current forex market already fully prices in any further ECB tightening measures.
by Gwen_Humuna
EUR/USD: Defensive Ahead of Eurozone CPI Data"The EUR/USD pair struggles to capitalize on previous positive moves and trades with slight bearish momentum in the Asian session on Tuesday. However, the spot price attempts to hold above the key level of 1.0600 and remains contingent on the price dynamics of the US Dollar (USD). The tightening stance of the Federal Reserve (Fed) further supports higher US Treasury yields, bolstering the USD's appeal for low-priced buying, thus acting as a resistance for the EUR/USD pair. This, coupled with expectations that the European Central Bank (ECB) may not raise rates further, contributes to limiting the spot price. This sentiment was reaffirmed by data showing Germany's consumer inflation slowed down from 4.3% YoY to 3.0% in October, marking the lowest level since August 2021. This decline comes amid looming economic recession risks, indicating the end of the ECB's rate hike cycle. In contrast, markets are evaluating the possibility of the Federal Reserve raising rates once again in 2023. Investors seem convinced that the Fed will maintain its hawkish stance given the challenging US economic recovery and persisting inflation. Thus, the focus will remain on the outcomes of the highly anticipated two-day FOMC policy meeting. The US central bank will announce its decision on Wednesday, and many anticipate it will maintain the status quo in its second consecutive meeting. Meanwhile, market participants will seek signals about the Fed's future rate hike path, impacting the USD's price dynamics and creating new momentum for the EUR/USD pair. Additionally, Tuesday's release of Eurozone flash CPI data will be scrutinized for short-term opportunities ahead of the US macroeconomic data - Chicago PMI and Conference Board Consumer Confidence Index."
by Gwen_Humuna
1
EUR/USD Holds Above 1.0550 Ahead of German GDP, CPI DataEUR/USD is trading sideways around 1.0550 on Monday morning in Europe. Traders are cautious ahead of crucial inflation and GDP data from Germany. Political tensions remain a cause for concern. EUR/USD might face strong resistance around 1.0570-1.0580, where the Fibonacci retracement level of 23.6% of the latest downward trend, the 100-day Simple Moving Average (SMA), and the 200-day SMA converge. If the pair rises above this area and stabilizes there, the next price targets could be 1.0640 (Fibonacci retracement level of 38.2%) and 1.0700 (psychological level, Fibonacci retracement level of 50%). On the downside, temporary support lies at 1.0530 (static level) before 1.0500 (psychological level) and 1.0450 (recent low point). EUR/USD rose to 1.0600 at the end of last week but lost momentum and closed almost unchanged on Friday. Early Monday, the pair moved within a tight channel around 1.0550. Short-term technical prospects indicate a lack of directional momentum. Buyers might hesitate to bet on a stable Euro recovery unless the pair breaks the 1.0570-1.0580 barrier. Markets expect Germany's economy to contract by 0.7% annually in the third quarter. Later in the day, Germany's Destatis will release October inflation data. On a yearly basis, the Consumer Price Index (CPI) is forecasted to rise by 3.6%, down from the 4.3% increase recorded in September. Worsening economic prospects in the Eurozone and increasing signs of slowing inflation have allowed the European Central Bank (ECB) to maintain its key interest rates. Unless German CPI inflation unexpectedly surges in October, the market is unlikely to reconsider the ECB's interest rate outlook. In an interview with Croatia's state television HRT1 over the weekend, ECB policy maker Boris Vujčić stated, "We have completed the process of raising interest rates." In the latter half of the day, the U.S. economic calendar does not feature any high-impact releases. Meanwhile, U.S. stock index futures were last seen rising between 0.3% and 0.7%. The opening gains on Wall Street could potentially weigh on the U.S. dollar, but investors may limit large positions ahead of the Federal Reserve's monetary policy announcements on Wednesday.
by Gwen_Humuna
EUR/USD Nears 1.0500 Amid ECB Focus"In Asian trading on Thursday, EUR/USD remains defensive, hovering around 1.0560, the lowest in a week, as traders await the European Central Bank (ECB) interest rate decision. The currency pair continues its decline for the second consecutive day, extending its retreat from monthly highs. Support was found around the 20-day Simple Moving Average (SMA) at 1.0560. Daily chart technical indicators paint a mixed picture, with momentum hovering around the midpoint but trending downwards, and the Relative Strength Index (RSI) showing a positive slope but also turning south. The pair is currently testing support around 1.0560. On the 4-hour chart, technical indicators indicate a bearish trend. The primary support is the upward trendline around 1.0550. As long as the price stays above that level, the Euro's recovery potential remains intact. However, breaking below could incur additional losses, initially targeting 1.0530 and then 1.0500. To shift the technical outlook to bullish, the Euro needs to rise above 1.0610.
by Gwen_Humuna
EUR/USD Holds Recovery Below 1.0700 Ahead of Eurozone and US PMIEUR/USD continues its recovery but remains below the 1.0700 level early on Tuesday. The pair benefits from the decline in US Treasury yields and the weakness of the US dollar. Positive changes in risk sentiment support the new upward trend. Keep an eye on EU/US PMI data. The EUR/USD exchange rate accelerated its gains on Monday, surpassing the 1.0640 level. It continues to move further away from the 20-day Simple Moving Average (SMA), trending upwards. The daily chart indicates further potential for an increase, with significant resistance at the 55-day SMA around 1.0710. On the 4-hour chart, the pair has broken a significant downtrend line, significantly improving the outlook for the Euro and indicating further potential for price increase. Although the price is still above 1.0595, there is a possibility of more significant gains. Below that level, support appears around 1.0550, represented by the upward trend line from the October lows. Conversely, above 1.0670, the next targets are 1.0695, followed by 1.0710 and 1.0760. Short-term technical indicators suggest further upward movement; however, the Relative Strength Index (RSI) is currently above 70, indicating potential consolidation before another price increase. The EUR/USD exchange rate surged on Monday due to the weaker US dollar. The pair broke the downtrend line and rose to 1.0676, the highest level in a month. The outlook for the Euro remains favorable in the Asian trading session, although some consolidation might occur after a 100-pip increase. The sharp decline of the US dollar pushed the EUR/USD pair on Monday. The 10-year US Treasury bond yield initially rose above 5.00% but quickly reversed, dropping sharply to 4.84%. This sharp decline pushed the US dollar index down to 105.51, the lowest level of the day since September 22. Stocks on Wall Street showed mixed reactions as the drop in yields somewhat improved market sentiment. Volatility continues to dominate the bond market ahead of significant issuances. On Tuesday, Eurozone and US PMI data are expected to be released. There is a slight improvement in Eurozone consensus and a slight decrease in the US. The European Central Bank (ECB) will hold a monetary policy meeting on Thursday, along with important US economic indicators such as GDP and the Federal Reserve's preferred inflation measure.
by Gwen_Humuna
EUR/USD Steady Amid Dollar WeaknessEUR/USD maintains a higher level but remains below 1.0600 in Wednesday's Asian trading. Risk sentiment prevails, weighing on the US Dollar, especially amid positive data from China. Market focus is on Lagarde's speech and EU/US data. The EUR/USD rate has risen above the 20-day Simple Moving Average (SMA), which still slopes downward. The Momentum indicator is above 100, signaling positivity for the Euro, though the overall trend remains bearish. On the 4-hour chart, the price is well-supported and above key SMAs, with technical indicators indicating an uptrend. The current resistance level is around 1.0600, and a breach could draw attention to 1.0630. Closing above this level daily would pave the way for further gains. Conversely, dropping below 1.0540 could weaken the Euro, pushing it towards 1.0500. EUR/USD rose on Tuesday, defying positive US data and higher Treasury yields. The pair reached a high of 1.0595 before retracing. ZEW's survey shows positive signs in the region, with the Eurozone's economic sentiment index improving to 2.3 from -8.9 in October, beating market expectations. Germany's ZEW also recovered from -11.4 to -1.1, surpassing the market's consensus of -9. Next week, the European Central Bank (ECB) is set to hold its monetary policy meeting, expected to keep rates unchanged for the first time since June 2022. On Tuesday, optimistic US economic data included Retail Sales (up 0.7% in September, compared to the expected 0.3%) and Industrial Production (0.3% vs. 0%). The US Dollar briefly gained from this data but quickly lost momentum. EUR/USD dropped to 1.0540 but then reversed its uptrend. Both US and European bond yields surged, with the US 10-year yield rising to 4.86% from 2.60%, and Germany's equivalent yield increased from 3.40% to 2.88%. Bond markets continued to experience significant fluctuations. If Eurozone rates follow Treasury yields, the impact might be offset, as seen on Tuesday. However, robust US data could limit EUR/USD's upward potential. On Wednesday, Housing Permits, Building Permits, and the Beige Book by the Fed are due. Stay tuned for updates on this dynamic market scenario.
by Gwen_Humuna
1
ECB's Next Move in Inflation Fight: Managing Excess Liquidity Frankfurt, Reuters - In the ongoing fight against inflation, European Central Bank (ECB) policymakers are gearing up for a significant shift in strategy. They are set to deliberate on ways to address the vast pool of excess liquidity inundating banks, with the possibility of raising reserve requirements emerging as the initial tactic. This pivotal discussion is expected to kick off at the ECB's forthcoming meeting in Athens on October 26 or during an autumn retreat for policymakers. Despite the ECB having already raised interest rates ten times to record levels, inflation still stubbornly hovers above its 2% target. With interest rates likely to remain unchanged until December, policymakers are pivoting their attention to the massive infusion of funds into the banking system through a decade of bond purchases. This surplus liquidity undermines the effectiveness of rate hikes, reduces competition for deposits, and leads to substantial interest payments and potential losses for some central banks. Sources indicate that the debate on curbing excess liquidity will focus on three key areas: revising the mandatory reserves banks maintain at the ECB, unwinding the bond-buying programs, and establishing a new framework for influencing short-term interest rates. While an ECB spokesperson declined to comment, insiders suggest that several policymakers favor increasing the reserve requirement from the current 1% of customer deposits to potentially as high as 3% or 4%. This move would serve the dual purpose of absorbing excess cash from the banking system and reducing interest payouts by the ECB and the eurozone's national central banks. However, some policymakers advocate bundling the decision on reserves with discussions regarding the ECB's asset purchase schemes and interest-rate framework, which could lengthen the decision-making process. Shrinking the 4.8 trillion euro debt pile acquired by the ECB since 2015, mainly to counter deflation risks, poses even greater challenges and market sensitivities. While phasing out the ECB's Pandemic Emergency Purchase Programme (PEPP) by not replacing maturing bonds is an option, policymakers are cautious about upsetting financial markets, particularly Italian government bond investors. ECB President Christine Lagarde recently indicated that bond-buying schemes were not on the table at the latest policy meeting, emphasizing the importance of PEPP for policy transmission. While there have been suggestions to sell bonds acquired under the older Asset Purchase Programme, some argue this would result in even larger losses for the ECB. Sources suggest that a decision on bond-buying schemes might not materialize this year and, if it does, may not take effect until early 2024 or later in the spring. Furthermore, debates surrounding the policy framework—whether the ECB should continue to set an interbank rate floor or revert to a corridor system—are expected to extend into 2024, as the volume of excess reserves in banks keeps the ECB effectively locked into a floor system. A study presented at the ECB's summer symposium in Sintra suggested that, now that monetary stimulus is no longer necessary, the ECB could reduce bank liquidity to a range of 521 billion euros to 1.4 trillion euros while still meeting banks' reserve needs." This revised text provides a more engaging and concise summary of the original content, making it more attractive to readers.
by Ayame_Hana
53
EURSGD ____ INCOMING BULLISH RALLYHi Guys, I'm sure most of you are unfamiliar with this pair, however, this pair has some good price movement at play that could provide nice trading opportunities. We just had a bit of a sell-off for the past weeks as prices entered a strong weekly/monthly supply zone. This sell-off brings the price to a key daily demand zone of which the price is meant to cool off bearish steam. Looking at my chart, you will notice that price is currently sweeping sell-side liquidity and by the time this sweep has been satisfied, the bullish rally will begin. I expect the price to get into my POI (blue box) before I start looking for CHOCH from bearish to bullish. If you like this analysis, be sure to give me a like. Follow for more updates. Cheers, David
Long
by jabariofafrica