Good day forex traders.
A merry xmas to everyone! How was your trading for the week? Hope Santa gave you an early Xmas present of pips.
In the previous EUR/USD review we noted on the resistance encountered. Technical activities indicated a possible formation of a squeeze. The US Federal Reserve hiked interest rate as expected.
Looking at the EUR/USD weekly chart above we note that the currency pair is pivoting around the region of 1.18. If the range continues to narrow, it is likely that a technical squeeze may happen.
In the near future we do not expect a significant pick up in euro value. It remains plagued by a lack of inflation. Gulf News reports ”
Brussels: Eurozone wage growth slowed in the third quarter from a two-year high hit in the April-June period, data released on Tuesday showed, offering little comfort for the European Central Bank (ECB) in its search for a pickup in inflation.
Hourly labour costs rose by 1.6 per cent year-on-year in the July-September quarter, compared with 1.8 per cent in the second quarter, which had been the highest level since the first quarter of 2016.
Wages were also 1.6 per cent higher year-on-year in the third quarter from a 2.1 per cent increase in the second, which had been the highest rate since the first quarter of 2015.
Weak consumer price inflation is a particular problem for the ECB as it has undershot its nearly 2 per cent inflation target for over four years despite unprecedented stimulus and will not reach its goal before the end of the decade.
Inflation was 1.5 per cent in November. ”
Across the Atlantic, while the US Federal Reserve is still on a path of hiking interest rates, the growing consensus is that the market has pretty much priced in the development.
As we head into the last week of the year, do be mindful of the possible effects of low liquidy. We are currently flat on our market engagement.
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