Hello, dear colleagues!
Today is the last trading day of the week. In fact, the trading month will also end soon. In our review, we will focus on the epidemiological situation in some European countries, rising inflation, and the macroeconomic calendar. We will also make a technical analysis of the euro/dollar pair.
Thus, Germany decided to impose tough containment measures for those who refuse to get vaccinated. All medical personnel will have to receive both doses. The German authorities had to take such measures amid a surge in the number of new virus cases. According to Angela Merkel, if the number of vaccinated people had been higher, the government would not have introduced such measures. Notably, people have mixed attitudes towards vaccines. Most are concerned about side effects, which in fact could be caused by the injection.
Meanwhile, the US inflation continues rising. The Fed's assumption that the surging inflation is just a short-lived phenomenon is absolutely false. The jump in consumer prices was mainly caused by an imbalance between demand and supply and disruptions in supply chains. In addition, rising salaries also cause concerns among the Fed's members. Notably, the future reappointment of Jerome Powel to a second term as Federal Reserve Chairman may depend on his ability to cope with growing inflation. However, Jerome Powell prefers the wait-and-see approach concerning the issue. In the near future, it will become clear whether Jerome Powell will take decisive measures or just give up.
Let us take a look at the economic calendar and determine the events that may affect the euro/dollar pair. Yesterday's report on the US unemployment claims data turned out to be worse than expected. Economists had expected a decline to 260 thousand, whereas the indicator dropped to 268 thousand. What is more, the previous figures were upwardly revised to 269 thousand from 267 thousand. Today, only speeches provided by ECB President Christine Lagarde and FOMC Member Richard H. Clarida may somehow influence the main currency pair.
Daily
On the daily chart, we see that yesterday, the euro/dollar pair advanced, thus forming the Morning Star pattern, which consists of three candlesticks. This reversal pattern is quite strong. If market participants price in this pattern, the nearest bullish target will be located at 1.1436 (Tenkan-sen) and 1.1478 (Kijun-sen).
At the moment, the pair is trading below an important level of 1.1400. On Friday, it is always difficult to make forecasts since traders usually lock in profits, thus causing various changes. Although the formed pattern is a reversal one, the main trend remains bearish. That is why market participants may simply ignore it. Thus, today, it is better to remain cautious and avoid opening new positions. On Monday, judging by today's close levels, it will be easier to predict the pair's movement.
Good luck!