Forex Technical Analysis & Forecast by RoboForex

[RF roboforex]

The Euro couldn’t keep momentum. Overview for 21.08.2019​

EURUSD was moving upwards last night influenced the Italian news, but couldn’t continue the momentum.

EURUSD is under slight pressure on Wednesday morning. The current quote for the instrument is 1.1094.

The Italian Prime Minister Giuseppe Conte resigned from his position and the country’s President accepted his resignation. The reason is internal political turmoil that split the governing coalition consisted of two parties, “Five Star Movement” and “Northern League” (Italian “Movimento 5 Stelle” and “Lega Nord” respectively). Conte shifted the responsibility for this onto Matteo Salvini, the Deputy Prime Minister of Italy and the Secretary of Lega Nord.

It appears that the parliament will be dissolved and the President will call new elections.

For Italy, it’s an opportunity to erect a new government, which will try to solve the budget issue. The European Union warned Rome on several occasions about the consequences of the budget deficit the country had. They might be fines from the EU, at least, or suspend the country from the alliance, at most. The first scenario is quite neutral for the European currency, while the second one is extremely negative.

Market players’ attention is still focused on the Jackson Hole Symposium this Friday, where they expected a speech from the FOMC Chairman Jerome Powell.

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[RF roboforex]

EURUSD is waiting for what Powell has to say. Overview for 23.08.2019​

On Friday, the major currency is under pressure again; investors are focused on events in Jackson Hole.

EURUSD changed the direction once again on Friday afternoon; right now, it is moving downwards. The current quote for the instrument is 1.1069.

Today at 5 PM Moscow time, the US Fed Chairman Jerome Powell will deliver a speech in Jackson Hole. He is widely expected to make some announcements on further prospects of the US monetary policy. The regulator may say something about the QE. Or Powell may confirm that the USA is going to continue the procedure of cutting the rate and explain why. If he does speak of softening the regulator’s monetary policy, the USD will get under serious pressure.

The FOMC Meeting Minutes published earlier confirmed that the USA set a course for loosening, that’s why market players want Powell to say about this as much as possible.

The current fundamental background for the European currency is quite mixed, although yesterday’s numbers were quite good. Westpac believes that the European Central Bank is ready to cut the rate and Governor Mario Draghi did a great job to prepare market players for that. In addition to that, the QE revival is also possible.

There are some complications with Spain and Italy and their finances. Most likely, the ECB will keep this issue in sight, because uncertainty with budgets of these countries may be pretty risky for the Euro Area and the ECB’s monetary policy.

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