USD Market Forecast: Navigating the Economic Landscape as of 08.12.2023

By Gustavo Nils Dec8,2023

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The markets’ rejection of the US dollar in November was too fast. All because of greed, which does not lead to good. Will the Fed punish markets for their overconfidence? Let’s discuss this topic and make up a trading plan for EURUSD. Monetary policy depends on data, but Fed officials still decide everything. The problem is that the markets are not listening to them. The US Central Bank has repeatedly stated that it will not make decisions based on one report. However, the situation in the markets changed significantly after the release of US inflation data for October. Of course, investors don’t listen to the Fed because they are greedy. Who doesn’t want to be the first to enter sales of the rising S&P 500 or buy Treasuries at the very bottom? If Treasury rates fall so low and so quickly, the US dollar will be defeated and the S&P 500 will reach 5000 much sooner than most ardent bulls think. Financial conditions will weaken so much that a new inflation peak will become a reality. The FOMC’s December forecast will not differ significantly from September. Just don’t expect borrowing costs to rise to 5.75%. Markets are outpacing themselves and should be punished for it. Perhaps EURUSD will grow after the release of US employment data, but expectations of hawkish forecasts from the Fed will aggravate the situation for the bulls, allowing entering sales if the pair is unable to return to the trading range of 1.08-1.1.

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