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Forex Signals

Morgan Stanley recommend SELL EUR/USD to 1.03

Morgan Stanley recommend SELL EUR/USD to 1.03

"We expect EUR/USD to continue softening in the near term, falling to 1.03 by 3Q22 and perhaps even overshooting to parity as concerns about local geopolitics and commodities intensify meaningfully further," MS notes.

However, we expect EUR/USD to begin rebounding modestly in 4Q22and into 2023, with upside driven by reduced fixed income outflows and a weaker USD on the one hand, but limited by continued geopolitical risk premium, relatively tepid growth numbers, and low relative local returns on the other hand. Further optimism on EU integration and an accelerated ECB normalization could bring EUR/USD toward our bull case of 1.14, while sub-expectations growth may keep EUR/USD under 1.10,


TopFxInvest want to take this sell trade from 1.8 because we have a confluence of resistances 0.6 Fibonacci from last swing, Horizontal line of  Resistance also diagonal trendline. Take this trade only with Risk Off sentiment or USD Strength day and manage it according to news Flow.

Alway combine Fundamental Analyses with Technically Analyses

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Growth forecast are downgraded in Australia & United States

Growth forecast are downgraded in Australia & United States
  • Goldman Sachs change their growth forecast for US  from  5%-6% in 2021 to 3,4% in 2022 because of two factors:
    spread of Omicron Variant 
  • diminishing expectations for fiscal stimulus

Deloitte projects 4% GDP instead of Reserve Bank of Australia 5,5% 

Deloitte Access Economics says the Omicron variant manes the RBA forecast is too optimistic because omicron is Spreading at a rapid rate and half the workforce would likely miss an extra week of work in H1 of 2022.

But with optimism Deloitte inform us that Omicron would not cause the same economic problems as the first two waves.

Will economy drop into 2022 what is your opinion?! 

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CAD will go up according JPMorgan - Rate increase 0.25-0.5 is expected

“Based on rhetoric from the Bank of Canada in December, it was clear that labour market dynamics and outperforming economic data had created heightened concerns at the Bank that the output gap was closing more rapidly than expected,” wrote Silvana Dimino, a New York-based economist at J.P. Morgan, in a report to clients Tuesday

Dimino sees the Bank raising its benchmark rate by 25 basis points to 0.5 per cent in January; her team previously called for the first move in April. She expects there will be five rate hikes this year, which would push the benchmark rate to 1.5 per cent by year-end.  

She also expects the Bank to begin a modest run off of its balance sheet in the second half of this year.

As of mid-day Wednesday, overnight index swaps pegged the probability of a January rate hike in Canada at 46 per cent.

In October, Bank of Canada Governor Tiff Macklem indicated he would not tighten policy until the economic recovery was complete – something he expected to happen in the “middle quarters” of this year. But data since then suggest the economy has been outperforming.

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Highest CPI from 1982 - US CPI 7% but no help for $

Prior was 6.2%

m/m CPI +0.5% vs +0.4% expected

Prior m/m reading was +0.8%

Real weekly earnings +0.1% vs -0.2% prior (prior revised to -0.4%)

Full report

Core inflation:

Ex food and energy +5.5% vs +5.4% y/y expected

Prior ex food and energy +4.9%

Core m/m +0.6% vs +0.5% exp

Prior core m/m +0.5%

Some notable categories:

New vehicles +1.0% m/m

Used cars and trucks +3.5% m/m (and +37.3% y/y)

Apparel +1.7%

Shelter +0.4%

Gasoline -0.5%

Food +0.5%

Gold is UP 

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