The EUR/USD is in a consolidation phase and is being followed by a greater degree of European Central Bank intervention. The euro has been strengthening against the dollar with time, and there are major indicators that a break out of the current trend could be imminent. The opening range for the EUR/USD has been broken and now assumes greater risk as it threatens to reverse course. There are some major short-term indicators that the EUR/USD is beginning to consolidate from the previous large interest rate cuts, and there are also some long term price targets that are now within reach. EUR/USD has been able to sustain its current historic lows, and there is no clear sign that it will begin to reverse course anytime soon.
The EUR/USD opened on Friday lower than the opening range and is now based on a combination of short term and long term factors. These include the European Central Bank’s (ECB) stimulus package, which is being spread over a wider scale than originally planned. The effects of the ECB program are beginning to trickle in, and major economies like Germany are beginning to feel the impact on their respective currencies. The mix of factors is causing the EUR/USD to track the upward trend established in December. The opening range was followed by the release of the FOMC minutes of June 29th, which confirmed that the monetary stimulus package will not be expanded any further, and that the ECB’s program is limited to only giving Europe’s third largest economy an additional easing of its quantitative easing requirements for six months or more.
The EUR/USD is currently being driven down by the combined effect of the ECB’s actions, the global banking sentiment, and the recent weakness of the Japanese Yen. When combined with a weaker Euro, the pullback is becoming more visible. This is also occurring as the EUR/USD becomes increasingly correlated to the US Dollar, particularly as traders begin to anticipate that the Fed will begin to raise rates from their current low rate. As it becomes increasingly apparent that the Fed will not raise rates in the near future, traders will need to exit their positions and take a defensive stance. The combined effect of these two forces is likely to result in the EUR/USD continuing to track downward, rather than increasing. If the present trend continues, the combination of factors mentioned above will result in the EUR/USD continuing to weaken.
A number of traders who have been watching the EUR/USD closely predict that the ECB will begin to tighten its grip on the currency this week, and that this will push the EUR/USD downward. In addition, the combination of factors mentioned above will likely result in the EUR/USD continuing to track downward. It is likely that the ECB will try and lower its interest rates to stem the rising demand for money, while it simultaneously increases its monetary supply. The outcome of this tug-of-war will be interesting to watch over the coming weeks.
Should the ECB stick to its plan, there is a strong chance that the EUR/USD will begin to track lower. If this occurs, this could be a good time for traders to enter the market and capture some gains. For the moment, however, it is important to remember that these actions may have long term consequences. In particular, a sharp decrease in the EUR/USD could cause market participants to begin to move their money out of the free trade more quickly. This may result in increased liquidity problems and a correction that will occur rapidly. If this happens, it is likely that the market will experience large losses before recovering.
Should this occur, there is a real possibility that the EUR/USD will start to track higher on a short term basis. This would trigger a number of possible reactions in the market that would ultimately have very long term effects. Traders would need to react quickly and get out of the trade before the EUR/USD continues on this upward path. If this happens, many traders may find themselves on the wrong side of the investment curve.
The best way to avoid this potential disaster is to remain calm and make no quick decisions to get into the market. Traders should instead use technical analysis to see where the market may go before making any moves to capture a profit. By employing technical analysis tools, traders can become less susceptible to sudden large moves in the market since they can predict where the market will head before it makes an unexpected move. This makes the technical analysis process especially useful when markets are volatile.
In general, it is difficult to know exactly where the market will go before it makes a move. Markets may have certain patterns that can be used to predict where they may go next. However, these patterns may not always hold true for all pairs. As a result, it may be prudent to stay out of the market during the ECB meeting if a market is trending towards a more volatile direction.please visit our website by clicking