Forex EUR/USD Daily Video, January 18, 2023

[Sive Morten]

Good morning,

Currencies show now contradictive action. While JPY and EUR are trying to go down, NZD, GBP are showing upside action. So, market stands in some indecision action, watching for PPI, Retail Sales numbers. We still consider 1.0720-1.0750 area on EUR to make a decision on long entry:

 

[daren186]

I would have thought retail sales being worse in US would endorse the hawkish tone from the Fed combined with expected results in Euro inflation would give rise to a stronger dollar. How wrong am I?

 

[Sive Morten]

I would have thought retail sales being worse in US would endorse the hawkish tone from the Fed combined with expected results in Euro inflation would give rise to a stronger dollar. How wrong am I?

Usually weakness in Retail Sales suggests drop of GDP. This is signs of economy decrease and this suggest sooner easing policy from the Fed. and makes pressure on US Dollar. At least recent reaction is based on these thoughts. But, in reality Fed could stay with top rate at least for another 3-5 months.