The Euro initially tried to rally during the trading session on Tuesday but has rolled over after Mario Draghi suggested that the ECB was opened to more quantitative easing. This of course put bearish pressure on the Euro itself, and therefore has the market repricing where the common currency should be. However, Wednesday features a statement out of the FOMC, and it is expected to be dovish as well. This will more than likely drive the pair back and forth.
EUR USD Forecast Video 19.06.19
At the end of the day, I expect this to be a big “nothing burger”, as both central banks will compete to see who can be weaker. With that, the 1.11 level underneath should be supportive, just as the 1.1350 level will be resistive. While I was talking about a “W pattern” just a few days ago, and now it looks like we may forgo that and simply go back and forth.
That would make sense considering that it’s summertime, and a lot of volatility can be socked out of the markets. If central banks around the world are trying to kill off their currencies, and then becomes a “race to the bottom”, as we enter a new phase of the currency wars, or perhaps better put: a new round of the same. At this point, I suspect that we will see a lot of volatility ahead of the Federal Reserve meeting, and then simply watch the market settle in this range again.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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