October 13th, The House of Representatives on Tuesday approved a bill to temporarily increase the US government debt limit

On Tuesday, October 12, at the end of the day, the euro rate fell by 0.19%, to 1.1530. EUR / USD rallied to a session high of 1.1570 during the European session, but failed to maintain its bullish tone. Economic sentiment indices in Germany and the euro area disappointed the market with low performance. The decrease in the ZEW indicator is associated with disruptions in the supply of raw materials and intermediate products.

The fall of the pair accelerated after breaking through the support of 1.1550 and stopped at the level of 1.1524. Due to the depreciation of the euro, the dollar index rose. The dollar index contains 57.6% of the EUR / USD pair. The Australian and the New Zealander traded in positive territory for a long time against the American and also lost their positions by the close of the day. The dollar appreciated against major currencies, ignoring the decline in 10-year bond yields.

Scheduled statistics (GMT +3):

• At 09:00 Britain will announce changes in GDP, industrial production, manufacturing and trade balance for August. Germany is to publish the consumer price index for September.
• At 12:00 the eurozone will announce the change in industrial production for August.
• At 15:30 the US will present the consumer price index for September.
• At 21:00, the US Federal Reserve will publish the minutes of the FOMC meeting.

Current situation:

At the time of writing this review, major currencies are trading in positive territory. The leaders of growth are the New Zealander and the British pound. The Australian came under pressure due to the decline in iron ore prices. Other currencies could have strengthened on the news that the House of Representatives on Tuesday approved a bill to temporarily raise the US national debt limit by $ 480 billion.

The law is expected to be signed into law by US President Joe Biden on Wednesday, October 13. The federal government will be able to continue paying its bills in full in December and temporarily stave off an unprecedented default that would wreak havoc on the economy

Adoption of the law, a temporary solution. Congress will return to this issue in December. Republicans made it clear that the next ceiling debate would not be easier and warned Democrats not to expect help from them.

There is an opinion that volatility will decrease until the American session before the publication of the US CPI and the FOMC meeting minutes. The protocol will be studied for further guidance on when to expect the announcement of the QE cut.

We will hear from the Board of Governors today Brainard and Bowman. Lael Brainard will deliver a speech on “Engaging Tribal Leaders in Affordability and Economic Challenges during a Pandemic.” His speech is unlikely to have an impact on the market.

Michelle Bowman will deliver a presentation on "Formulating Monetary Policy and Economic Prospects." Her performance may have an impact on the dollar.

Bostic and Clarida performed on Tuesday. Bostic said that the slowdown in US employment growth should not affect the timing of winding down, Clarida - employment growth has reached a level at which you can start winding down QE. The rhetoric of the US Federal Reserve speakers points to the beginning of the curtailment of the program in November.

Technical analysis:

In the Asian session, there is an increased demand for risky assets. Many important events are planned for today, therefore, uncertainty and multidirectional fluctuations will remain on the market until Thursday.

The price came up against resistance, which was formed from different trend lines: the trend line from the top of 1.1587, the trend line from the minimum of 1.1529 (yesterday was a support) and the balance line (sma 55).

If the inflation report is weak, the euro will go up. To practice the "double base". There, everyone will be waiting for the US Federal Reserve Protocol. The target for buyers is 1.1577. If something goes wrong and inflation goes above the forecast, then the target level below will be 1.1505.

Summary: the euro closed lower on Tuesday. Weak data from the ZEW in the Eurozone and Germany jumped the single currency. After breaking through the support of 1.1550, the fall accelerated to 1.1524. On Wednesday, positive came from the United States - the House of Representatives approved a bill to temporarily raise the US government debt limit by $ 480 billion. Market participants are focused on inflation in the United States and the FRS protocol. A surge in volatility is expected in the American session.

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