EURUSD tests major support before EZ inflation updates! | MarketTalk: What’s up today? | Swissquote

Show notes

The week started on a cautious note as stocks in Asia mostly sold off following a rough week in the US, where the Federal Reserve’s (Fed) hawkish pause triggered a fresh wave of worries that the rates would stay higher for longer. The yields pushed higher as the S&P500 recorded the worst performance over the week since the banking crisis in March.
The UAW strikes will broaden to all GM and Stellantis parts plants in the US, which means that 5600 more workers will join the movement (Ford will likely be spared, for now, as some good progress is made on negotiations with the UAW) and the US will shut down by the end of the week if politicians fail to pass a dozen of bills. The latest US GDP update will fall in this chaotic environment, but the expectation is a positive revision !
In the currency markets, the US dollar extends gains. The dollar index entered the bullish consolidation zone after the Fed decision, the EURUSD tested an important Fibonacci support last week, and the USJDPY pushes timidly higher, fearing a direct FX intervention to turn the market upside down.
Inflation numbers will be on the menu in many locations this week. For Europe, any softness in inflation should give further support to the euro bears, while higher than expected numbers, which I believe could be the surprise of this week could revive the European Central Bank (ECB) hawks, but will hardly prevent the euro from seeking into a deeper depression.
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