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EURUSD momentarily corrects upward

US Federal Reserve speakers have been increasingly engaged in a lively discussion about the near-term path of monetary tightening. Specifically, St. Louis Fed President James Bullard reiterated his call for a 100 bp hike in interest rates by July 1, while noting that the last four inflation reports flag an uptick in inflationary pressures.

According to the current Fed fund target rate, following the outcome of the next meeting, which will be held on March 16, the odds are 57% that rates will be raised immediately by 50 bps, and a 43% probability of a 25 bp hike.

The technical picture shows that the decline of the EURUSD pair is taking a breather. The pullback ended overnight at 1.1280 as the pair exited the downward channel that has been in play since last Thursday. However, it is still too soon to speak of a reversal. Without a major shift in sentiment, the pair could again test 1.1280, and if this level is breached, the downside target remains 1.1121.

As regards today's macro data flow, the focus will be on preliminary Eurozone GDP for Q4. The median consensus is calling for 4.6% YoY and 0.3% QoQ.

Upcoming macro releases (GMT 3)


  • 13:00 Germany: ZEW economic sentiment (February)
  • 13:00 Germany: ZEW current conditions (February)
  • 13:00 Eurozone: GDP (YoY, preliminary Q4)
  • 13:00 Eurozone: GDP (QoQ, preliminary Q4)
  • 13:00 Eurozone: ZEW economic sentiment (February)
  • 16:30 US: PPI (YoY, January)


  • 13:00 Eurozone: industrial production (MoM, December)
  • 16:30 US: retail sales excluding automobiles (MoM, January)
  • 16:30 US: retail control group (January)
  • 16:30 US: retail sales (MoM, January)
  • 22:00 US: FOMC minutes

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