EURUSD Market Update 12 Mar 2022

The next FOMC Interest Decision and Press Conference will be held on 15-16 Mar 2022.

In the current market, there are way too many uncertainties such as the Russia-Ukraine war, a new 40 years high Inflation rate of 7.9%, FOMC decision on the speed of rate hike, sanctions between Russia and other countries, extreme volatility in the commodities market. Hence, it is time for us to be cautious again.

There is no doubt a 0.25% rate hike is most likely in the picture for the upcoming Interest decision. But with the 40-year high inflation rate and no FOMC meeting in April, it won’t be a surprise a higher rate hike might happen in order to control the inflation rate quickly. Furthermore, the US Midterm election is in Nov 2022, there are not too many FOMC meetings from now till they start the election campaign. In other words, US Fed only has a few chances to use rate hikes to control inflation before the Midterm election. A higher rate hike at an early stage will give them a better chance to control the inflation rate and for the public to digest the impact before the election. Any further tension of the Russia-Ukraine war is also another bullish factor for the USD.

On the other hand, sanctions between Russia and US will definitely hurt the US economy, which might make US Fed consider a lower rate hike. The material impact of these sanctions is not fully realized by the market yet. European Central Bank’s (ECB) surprise move to end the bond-buying program in Q3 is another bullish factor for EUR.

Recommendation

With this outlook, as usual, and to be on the safe side, we strongly recommend all Ophiuchus and Limitless EA users to schedule to stop trading from 15 Mar 2022 till 18 Mar 2022 to avoid a strong market move due to this announcement. You can use the stop trading period feature in the EA to do that. You can also decide to extend the stop trading period (eg, till 19 Mar and only start trade on the week after next) if you would like.

Disclaimer – Please note that Limitless Trading is not liable for our recommendation and is not responsible for any loss or profit caused by this recommendation. You should assess your personal circumstances and perform your own research to make decisions for your trading.