It was a Fed`s week, where its officials decided to leave rates unchanged for one more time. Markets were expecting such a move, however, the most important question related to timing of Fed`s cutting interest rates was left a bit in the dark. Namely, Fed Chair Powell admitted that the jobs market and the economic output remained strong, despite the rate hikes during the previous period, however, the 2% targeted inflation is still under question. Powell noted that the rates have “probably” peaked, however, the FOMC members need to see the clear data which imply that the inflation is clearly headed toward the targeted level. In this sense, the rate cut will most probably not occur in Q1 of this year, while the market is currently anticipating May of this year.
Other posted results for the US economy show much better than expected non-farm payrolls, posted on Friday. Although the market was expecting to see the figure of 180K, the released figure was almost doubled to 353K. At the same time, the unemployment rate was holding at 3.7%, lower from the market estimate of 3.8%. Average hourly earnings rose by 0.6% in January, which is an increase of 4.5% on a yearly basis. Michigan Consumer Sentiment Final for January was also a surprising figure at 79, much higher from previously posted 69.7, and also a bit higher from market estimate at 78.9. On the other hand, CB Consumer Confidence in January modestly dropped from estimated 115 to 114.8. The US ISM Manufacturing PMI in January was increased to 49.1, from revised 47.1.
GDP growth rate for Q4 for Germany was -0.2% on a yearly basis, a slightly better from revised -0.3%. At the same time, the GDP growth rate for the same period in the Euro Area was 0.1%, slightly better from previous 0%. Regardless of other economic data, the German jobs market is still holding, as its unemployment rate in January was 5.8%, a modestly lower from the forecasted 5.9%. Preliminary data for inflation in Germany for January show 2.9% increase on a yearly basis, a bit lower from forecasted 3%. Inflation rate in the Euro Areas in January was standing at -0.4% for the month and 2.8% on a yearly basis, and was generally in line with forecasts.
Currency pair started the previous week around 1.085 with modest selling pressures. The FOMC meeting was the major event of the week and the interest rates decision. Still, much stronger than anticipated US jobs data pushed the currency pair down to 1.0784, where it is ending the week. The RSI made a move from the level of 50 down to 38, indicating that the market is currency more oriented toward the oversold side. Moving average of 50 days started with quite modest convergence toward the MA200, however, there is still some space between the lines in order for a cross to occur.
Charts are showing that the currency pair started its move toward short term testing of the 1.075 support line. This will also mark the beginning of the week ahead. This level was also tested at the beginning of December last year, which could mark the level of short term stop for the pair. It could also mark the oversold moment, from where the reversal might start. On the other hand, there is also some probability for a short reversal toward the 1.08 resistance level, before the final testing of 1.075 level.
Important news to watch during the week ahead are:
Euro: Inflation rate for Germany, final for January
USD: ISM Services PMI for January
Other posted results for the US economy show much better than expected non-farm payrolls, posted on Friday. Although the market was expecting to see the figure of 180K, the released figure was almost doubled to 353K. At the same time, the unemployment rate was holding at 3.7%, lower from the market estimate of 3.8%. Average hourly earnings rose by 0.6% in January, which is an increase of 4.5% on a yearly basis. Michigan Consumer Sentiment Final for January was also a surprising figure at 79, much higher from previously posted 69.7, and also a bit higher from market estimate at 78.9. On the other hand, CB Consumer Confidence in January modestly dropped from estimated 115 to 114.8. The US ISM Manufacturing PMI in January was increased to 49.1, from revised 47.1.
GDP growth rate for Q4 for Germany was -0.2% on a yearly basis, a slightly better from revised -0.3%. At the same time, the GDP growth rate for the same period in the Euro Area was 0.1%, slightly better from previous 0%. Regardless of other economic data, the German jobs market is still holding, as its unemployment rate in January was 5.8%, a modestly lower from the forecasted 5.9%. Preliminary data for inflation in Germany for January show 2.9% increase on a yearly basis, a bit lower from forecasted 3%. Inflation rate in the Euro Areas in January was standing at -0.4% for the month and 2.8% on a yearly basis, and was generally in line with forecasts.
Currency pair started the previous week around 1.085 with modest selling pressures. The FOMC meeting was the major event of the week and the interest rates decision. Still, much stronger than anticipated US jobs data pushed the currency pair down to 1.0784, where it is ending the week. The RSI made a move from the level of 50 down to 38, indicating that the market is currency more oriented toward the oversold side. Moving average of 50 days started with quite modest convergence toward the MA200, however, there is still some space between the lines in order for a cross to occur.
Charts are showing that the currency pair started its move toward short term testing of the 1.075 support line. This will also mark the beginning of the week ahead. This level was also tested at the beginning of December last year, which could mark the level of short term stop for the pair. It could also mark the oversold moment, from where the reversal might start. On the other hand, there is also some probability for a short reversal toward the 1.08 resistance level, before the final testing of 1.075 level.
Important news to watch during the week ahead are:
Euro: Inflation rate for Germany, final for January
USD: ISM Services PMI for January
