EUR/USD – the crucial day has come December 14, 2016

The EUR/USD has increased today and has managed to climb above the 1.0666 yesterday’s high, but remains to see what will happen in the coming hours, as you already know the Federal Reserve will publish the Federal Funds Rate in one hour, the USD could edged higher if the rate will be increased, however another disappointment will force the greenback to decrease sharply versus the other major currencies.
The FOMC members are expected to vote for the rate increase tonight, the rate is forecasted to be increased from 0.50% to 0.75%, another rate hike delay will ruin the USD, the currency will decrease sharply, while the Gold will increase significantly. The greenback has decreased today, despite the mixed data, the USD was pushed lower by the USDX’s drop, the index has resumed the minor correction.
The US Retail Sales have increased only by 0.1% in November, less than the 0.3% estimate, has increased less also versus the 0.6% growth in the previous reading period, the Core Retail Sales have come in worse as well, have increased by 0.2%, less than the 0.4% forecast. The Capacity Utilization was reported at 75.0%, below the 75.1% estimate, and less below the 75.4% from the previous reading period, while the Industrial Production have decreased by 0.4%, more than the -0.2% prediction.
The greenback wasn’t impressed by the PPI and the Core PPI growth, the economic indicators have increased by 0.4%, exceeding the economists’ forecasts. Moreover the Business Inventories have decreased by 0.2%, but weren’t able to save the USD from downside.
Tonight we may have high volatility after the FOMC Press Conference, you should be very careful not to suffer a heavy loss, maybe will be better to stay away from trading during the Press Conference.


The price has increased after the retest of the lower media line (lml) of the minor descending pitchfork, the behavior has changed on the short term as the rate has failed to make new lows, technically should reach again the median line (ml) of the descending pitchfork, but we’ll see how will react after the FOMC, could plunge aggressively the Federal Funds Rate will be increased. However the rate will increase sharply if the FED will decide once again to leave the rate unchanged. Technically the rate should drop further in the coming period because is trapped inside the descending pitchfork’s body and below the sliding parallel line, but the rate will be driven by the fundamental factors, so remains to see the direction.


I’ve added also the H4 chart to show you better the price action, is trying to recover after the yesterday’s minor drop, the rebound was expected after the false breakout the lower median line (lml) of the descending pitchfork, the near term target is at the median line (ML) of the descending pitchfork, could reach this level because the today’s main event will bring high action in the coming hours.

Leave a Reply