Vang SJC

Yesterday (17/12), EUR / USD saw a third consecutive decline in the context of the US Federal Reserve (Fed) raised interest rates for the first time in nearly a decade. The pair fluctuated in a wide range 1.08015 to $ 1.09128 $ before closing at $ 1.08242, down 0.77% from the opening price $ 1.09088.

Specific analysis The decline of the pair of you can watch here.


Fundamental Analysis

The market is still affected by monetary tightening decision (now US) Fed. On 16/12, the Open Market Committee (FOMC) voted through a unified decision to raise interest rates for the first time since 12/2008. The federal funds rate was raised by 25 basis points to 0.25-0.5%. Previously, short-term lending rate was kept near 0% for almost 7 years, as a result of economic recession from the global financial crisis.

Fed officials have acknowledged the US economy is ready for a rate hike as household spending stable, thriving housing market and the labor market is creating 200,000 jobs average each month, bringing the unemployment rate to 5% -by half period of 2009. Federal Reserve Chairman, Mrs. Janet Yellen said in a press conference after the meeting: “The first thing that Americans should realize That is the decision of the Fed today reflects the confidence of economic institutions in America. “

In the latest draft of the medium-term, the FOMC expects the federal funds rate will reach 1.4% until the end of 2016, before hitting 2.5% in late 2017. Looking back at the most recent tightening times 2004-2006, the Federal Reserve raise interest rates by 25 basis points in 17 consecutive meetings, bringing interest rates in 2006 was of 5.25%. However, Ms. Yellen said the Fed will not act mechanically but will review the data to determine the timing and amplitude of changes in interest rates. Prospects for the Fed to continue raising interest rates caused the greenback rose against other major currencies, putting pressure on the euro and drag the pair down. Psychology wait no longer, from now until the end of the year, the more likely the market will have to consider the economic data to predict the next move of the two central banks and the ECB Fed.

Today, the focus of the market is the only administrator of purchase (PMI) service sector Preliminary May 12. PMI is based on a survey of 400 private enterprises in the fields of transport, telecommunications communication, financial intermediation, business and personal services, information technology, hotel and restaurant. The components of this index include sales, employment, inventories and prices. The index greater than 50 indicates the sector is considering growth and vice versa. In December, the PMI services index is forecast 55.9 points, down 0.6 points from the previous month. If the report exceeded market expectations, confidence in the US economic growth will be strengthened, increasing the ability to raise interest rates as early as in the first quarter / 2016 of the Federal Reserve, to support the currency goes up.


Technical Analysis

Currently, at 14:17 GMT + 7 The pair is currently trading at $ 1.08621, up 0.35% from the opening price $ 1.08242.

Observe the chart H1 can see after closing around the lowest since 7/12 day in session yesterday, in the Asian session, the prices are as follow up, broke out at block 38.2 $ 1.08508 and have the ability to block progress at $ 1.09303 23.6. Predicting prices also rose in Europe on the threshold $ 1.08995 before turning down 38.2 points on clearance in the US session, ended the day in positive territory after three consecutive days of declines.

Tools TREND MuaEA SIGNAL buy signal in afternoon Asian session, currently earn about us 13 points.


Psychological Analysis

The market today has escaped pressure from the Fed meeting. Prospects for the greenback rose after raising interest rates likely to take the market buy dollar positions, pushing the pair down. But after three days the pair losing streak, the demand on the dollar is showing signs of weakness, many investors’ ability to sell the greenback in the last trading session of the week to take profits after the dollar has nearly 1.9% after the Fed decided to tighten.

Observe the H1 chart only 3 candles down from 7 candles increases, average body candle longer than the average increase trunk candle suggests reducing the buying power overwhelms selling. The pair is still fluctuating in a narrow range with small volumes by entering new European session, the pair predict will rise sharply later reduced adjusted and ended in the green.

The Fed raised interest rates make dollar becomes more attractive investment channels in the eyes of investors due to the higher interest rate. In its meeting of 15-16 / 12, the FOMC is expected to raise interest rates by 4 times in 2016 showed that dollar could still rise next year. Besides, considering the risks Europe faces as migrant status, slow growth, the threat of terrorism … the prospect of parity between the Euro coins and dollar still in sight, ability cause downward pressure on the pair in the short term.

Market commentary

Although still negative balance of decisive monetary tightening by the Fed, the pair is likely to increase for the first time in the past three sessions, predict EUR / USD will be closing at $ 1.09300.

However, as analyzed in the Risk, the price is likely to go down to the $ 1.07600.

Analyses of Group If24h

Linh Nhan