EURUSD to 1.14 (this week might give us new entry)

Powell came out Hawkish today saying interest rates are ‘likely to be higher’ than previously anticipated

At the same time the CME FedWatch Tool is now being pricing a 0.50% hike as the most probable scenario (we will know in 14 days from today).

Such news would normally make one go Long on USD and that could be the case for a little while but we need to remember:

LET THE NUMBER DO THE TALKING (and the Trading):

We need to await for the data to come out as the data will dictate what the Feds do and how the Dollar and the euro (as well as the markets) will react.

Let's take a look together at what to expect and what to be aware of:

🎖3 Live Trading Sessions (Reports) we can't miss:

🎫Friday March 10th - NFP Employment data

Employment is good, Feds can hike easier.
My expectation : after such Huge previous reports I expect a lower new Jobs (NFP) number. I will analyze the numbers in detail closer to Friday but my 'hunch' is already becoming sentiment. I would be very surprised to see another explosive NFP number.
The last 10 months the results have been in the 'deep green' with the most recent one being over 500k

🎫Tuesday March 14th - CPI Inflation Report
The last inflation report came out spooky as it showed inflation didn't drop enough/much.
My concern was energy prices, as both Oil and Gas were attempting a rebound.
That energy prices rebound was incomplete and that, for me, is the number one factor to expect eased inflation.... which in return can be the best 'chill pill' for Powell and the Feds

🎫Wednesday March 22nd - FEDS Rate Hike

The big one. A 0.50% rate hike is in play, Powell comes out bullish in front of the Congress today but it's the data (Jobs and Inflation) that will be decisive.
If I am right about NFP and CPI I would expect a 0,25% rate hike.

My feeling is that the market and the aware part of the public (including myself) have priced in the scenario of 'Rate hikes close to 6%

Powell's statement was "surprisingly hawkish," said Michael Brown, a market analyst in London. With a 50-basis-point rate hike now in play, Brown said a strong monthly jobs report on Friday would likely lead to "calls for a 6% terminal rate," nearly a percentage point higher than Fed officials had projected as of December.

Democrats on the committee focused on the role high corporate profits may be playing in persistent inflation, with Senator Elizabeth Warren of Massachusetts charging that the Fed was "gambling with people's lives" through rate hikes that, by the central bank's most recent projections, would lead the unemployment rate to increase by more than a percentage point - a loss associated in the past with economic recessions.

In any case, the pressure is ON and this month will 'show'.

I am expecting some more dovish days towards the second half of March, the same way things turned Hawkish after last month's data.


Not going to focus on Eurozone as Europe is a 'Big, Slow ship' that follows at it's own pace and European Central Bank officials have warned that they expect to raise interest rates to record highs after eurozone inflation for February was higher than forecast, even as economists predict a rapid easing in price pressures from the summer....

in other words, the US hikes could be coming to an end whereas the European's have a long road ahead.

CONCLUSION:

Not a perfect time to jump on EURUSD longs but the time to increase them is approaching. Perhaps this or next week i can see myself getting on new EURUSD Long positions.

My analysis shows 1.09 and 1.14 as key targets for this year, with the scenario of 1.036 being the 'worst case scenario' and a level I would love to see and Long.

One Love,

The FXPROFESSOR

PS. The next 15 days will be HUGE and we must be focused and on alert to grab those opportunities. Check my previous ideas and I hope this one also goes as well.