Last Friday’s statistics on the US Consumer Price Index were not surprising, although a bit unusual. The indicator skyrocketed to 6.8% y/y in November. On MoM, inflation was 0.8% against the expected reading of 0.7%.
Based on the latest inflation reports, among other things, the US Fed may announce its decision to speed up the closure of its QE programme by at least fifty per cent. In this case, the programme may be щук as early as March 2022 and the Fed may start discussing the rate hike in May.
Investors believe that the regulator may raise the rate by 50 basis points next year.
In the H4 chart, EUR/USD is trading downwards to reach 1.1120 and may later consolidate there. If the price breaks the range to the upside, the market may start a new correction with the target at 1.1363. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving below 0 and may later continue falling towards new lows.
As we can see in the H1 chart, EUR/USD is forming another descending structure to break 1.1243 and may later continue falling with the short-term target at 1.1166. After that, the instrument may correct to return to 1.1243 and then resume falling towards 1.1100. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is moving below 20, thus implying further decline towards new lows.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.