EURUSD is yet to decide the direction of money flow. The euro’s market is currently in a state of flux as buyers remain on the sidelines and await the decision from central banks this week. The currency pair is trading close to 1.0900, with traders watching closely for news from both the US Federal Reserve and European Central Bank on Wednesday and Thursday, respectively. If either bank decides to increase interest rates, then it could have a significant impact on the money flow direction in this currency pair, so investors should keep an eye out for any updates coming through during these meetings.
The EUR/USD has recovered some of its losses after two consecutive days of pullbacks, with the focus now shifting to the 1.0900 level ahead of key events this week from both the FOMC and ECB. Markets are expecting a rate hike of 25 bps from the Fed on Wednesday and a one-point increase in the policy rate by the ECB on Thursday, which is likely to determine investor emotion going forward. Investors will closely monitor any hawkish news emanating from these central banks, as well as any potential future actions they may take in light of improved growth prospects for Eurozone economies and the resilience seen in the US economy.
EURUSD Economic News Release
Before the outlook of Wednesday’s economic news releases. This week is also filled with reports such as those on German economic development and consumer confidence in the eurozone. There is already considerable sensitivity to this data due to Germany being one of Europe’s main economies. Last week, the EURUSD showed signs of fatigue, failing to hold the 1.09 level with positions favoring the US currency at peaks, confirming our earlier predictions that it would not disappoint traders looking for gains from USD strength.
For traders looking to take advantage of the sharp yearly rally in EUR/USD, it is important to pay close attention to key events this week, such as Germany’s flash Q4 GDP Growth Rate and EMU Final Consumer Confidence. In addition, traders should also watch for economic data from Germany on Tuesday, including retail sales, the unemployment rate, and flash inflation rates, as well as the EMU glimmer Q4 GDP Growth Rate. Furthermore, with recession concerns now appearing to have dwindled in the euro area and a hawkish narrative from the ECB. Market participants should keep an eye out for potential next steps from both the ECB and Fed at their upcoming gatherings.
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