EURUSD Monthly Time Frame Analysis Market is moving in the Descending channel and the Market has Fallen from the lower high area and Reached the Horizontal Support area of the Channel.
Where is EURUSD Today
The EURUSD markets are currently facing bearish market conditions. Looking at the monthly time frame for this majorly popular pair, it is quite clear that it is facing a very strong downward trend that is probably going to continue for the foreseeable future.
EURUSD H1 Time Frame Analysis Market is moving in the Descending channel and the market has rebounded from the lower low area of the Channel
This comes as no surprise considering that Lagarde recently revealed in her speech that the ECB currently has no intentions of increasing interest rates to combat inflation. Russia is struggling with its sanctions and the US is struggling with its sales which each contributed to the bearish conditions faced by EURUSD today. Currently, this dynamic duo is teasing the market around the 1.080 mark but it seems as though it could still continue testing support levels.
ECB Lagarde Speech
Early on Thursday, the European Central Bank released its new interest rates for the upcoming short term. For the past several terms, the ECB had left its interest rates unchanged at 0.00%. Therefore, analysts had predicted that this upcoming term would be no different and that the interest rates would stay at a solid 0.00%. This proved to be true when they released their monetary statement which revealed interest rates to continue at 0.00%. Shortly after this information was released, ECB President, Christine Lagarde, held a conference from her home due to testing positive for Covid-19 where she discussed the reasoning behind the rate decision as well as answer any questions that may arise.
In her speech, Lagarde reveals, “At today’s meeting we judged that the incoming data since our last meeting reinforce our expectation that net asset purchases under our asset purchase program (APP) should be concluded in the third quarter. Looking ahead, our monetary policy will depend on the incoming data and our evolving assessment of the outlook. In the current conditions of high uncertainty, we will maintain optionality, gradualism, and flexibility in the conduct of monetary policy. The Governing Council will take whatever action is needed to fulfill the ECB’s mandate to pursue price stability and to contribute to safeguarding financial stability. Inflation increased to 7.5 percent in March, from 5.9 percent in February. Energy prices were driven higher after the outbreak of the war and now stand 45 percent above their level one year ago. They continue to be the main reason for the high rate of inflation. Market-based indicators suggest that energy prices will stay high in the near term but will then moderate to some extent. Food prices have also increased sharply. This is due to elevated transportation and production costs which are in part related to the war in Ukraine.”
EURUSD H4 Time Frame analysis Market is moving in the Box Pattern and the Market has reached the Horizontal Support area of the pattern.
Russia Defaults On Payments
Russia has found itself in one of its first consequences as a result of its actions in terms of war crimes in Ukraine. Russia has a few foreign bonds that it repays whenever the installments are due. The bonds are to be paid in dollars according to the contractual terms. Therefore investors were not satisfied when Russia came forward with Roubles as the currency for payment. The reason Russia is unable to pay in dollars is because its dollar currency reserves are in banks in the US, UK, Canada, and EU. And these banks have frozen Russia’s accounts as a form of sanctioning on them due to the war crimes they’re committing in Ukraine. In light of this situation, it seems as though Russia will be unable to pay its investors for the foreign bonds for the first time since 1998. Therefore, Russia has defaulted on payments unless they decide to end the ongoing war in Russia by calling back their military.
Moody’s, the Bonds Company in charge of the bonds taken by Russia, has come out with a statement revealing details about what exactly has taken place. Moody’s reveals, “The bond contracts have no provision for repayment in any other currency other than dollars. Moody’s view is that investors did not obtain the foreign-currency contractual promise on the payment due date. Therefore, Russia may be considered a default under Moody’s definition if not cured by 4 May, which is the end of the grace period.” Russia believes that the entire financial system of the States is faulty and that it was built in a way to make other countries suffer in these type of circumstances. Press from Russia have revealed their thoughts on this ordeal. They state, “The West has already defaulted on its obligations to Russia by freezing its reserves. We want a new system to replace the Bretton Woods financial architecture established by the Western powers in 1944.”
Russia Warship Destroyed
Things continue to play against Russia’s favor as early on Friday it was revealed that one of Russia’s leading warships that was in the Black Sea, the Moskva, had sunk due to a supposed attack by Ukraine. Russia seems to deny all allegations that it faced an attack by Ukraine and they claim that it was the stormy weather that led to this situation. Evidences point against this claim and it seems that the fact that it was a target for a missile from Ukraine makes much more sense. Russia seems embarrassed to admit that they had not expected this attack, especially not on their best ships.
Sidharth Kaushal, a researcher in sea power, had revealed the real extent of the situation. He states, “It is the only class of ship the Russian navy currently has that fields a long-range air defense system. That matters because for the sort of operation the Black Sea Fleet is designed to do, the Moskva has the capability to sit back and create an air defense for the rest of the fleet, and at the same time provide command and control.” According to the Russian Defense Ministry, “While being towed towards the destined port, the vessel lost its balance due to damage sustained in the hull as fire broke out after ammunition exploded. Given the choppy seas, the vessel sank.”
US Retail Sales Growth
The US Retail Sales data was released early on Thursday which revealed that the sales are not growing at the rate they’re supposed to be.
They were only up by 0.5% which is very minimal movement. Jack Kleinhenz, Chief Economist at NRF, states, “Consumers have the willingness to spend and their ability to do so has been supported by rapid hiring, increased wages, larger-than-usual tax refunds, and the use of credit. They are largely dealing with the shock of gas prices but will be facing higher interest rates as the Federal Reserve tightens monetary policy in the coming months.”