The Euro has initially tried to rally during the trading session on Wednesday, but as we await the FOMC statement and press conference, it is very likely that the markets are just killing time until we get that out of the way. Regardless, this is a market that is a little extended so at the very least I think we are going to go sideways. With the Federal Reserve looking to keep monetary policy loose for the foreseeable future, it does make sense that this pair would go higher. Having said that, we cannot go straight up in the air forever, so I think a pullback, albeit slight, is probably in the cards.
EUR/USD Video 30.07.20
This is not to say that you can sell the market, quite the opposite. It means that you should be looking to buy the Euro at lower levels. Once we broke significantly above the 1.15 handle, it marked a major turning point in the direction of this market. I think at this point we are more than likely to see a lot of noise more than anything else, as this marketplace continues to struggle to push higher.
Once we do break above the 1.18 level though, I fully anticipate that this market will go looking towards the 1.20 level, and perhaps even beyond. The Euro is historically cheap and has been beaten down for several years, perhaps it is time for the trend to change longer-term? With the Federal Reserve out there pushing against the US dollar, that is more likely than not. However, we live in very volatile times so you cannot just jump in with both feet.
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This article was originally posted on FX Empire
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