Latest News

EUR/USD Forecast: Has a Volatile Day After a 75 bps Hike

The shorting of the Euro is the easiest way to buy the US dollar, as it is the antithesis of the greenback.

The EUR/USD has gone back and forth during the trading session on Thursday as we continue to hang around the parity level.The European Central Bank raised interest rates by 75 basis points, which was expected.However, during the statement, Christine Lagarde suggested that they would be “data dependent”, which tells me that the ECB might be raising rates going forward as she said, but it is a lot less hawkish than the Federal Reserve.


If we were to break down below the bottom of the last couple of days, it’s likely that the Euro could drop down to the 0.98 level. Rallies now still look suspicious to me, with the 50-Day EMA breaking below the 1.02 level and dropping. This of course is a very negative sign and when you look at the charts over the last several months, you can see just how highly correlated the 50-Day EMA is to what could be a downtrend line.

The candlestick shape is very much like a hammer, so I do think that we could get a little bit of a bounce. This is especially true as we head into the weekend since the market is likely to see some short covering as so much money has been made to the downside. Furthermore, it seems as if we have a lot of interest in the parity level, as it is essentially an anchor.

I am going to let this market rally a bit so I can start shorting it again. The ECB is still stuck, and of course, the biggest problem they are going to be facing is the fact that there is going to be a lack of energy heading into the winter, and therefore it’s difficult to imagine that the economy will be able to handle a lot of tightening. Eventually, central banks will have to loosen monetary policy, and I believe that the European Union will probably be one of the first ones. Furthermore, a lot of traders think this is well, so I think there’s a lot of interest in picking up “cheap US dollars.” The shorting of the Euro is the easiest way to buy the US dollar, as it is the antithesis of the greenback.

Ready to trade our Forex prediction today? We’ve shortlisted the best Forex trading brokers in the industry for you.

What's your reaction?

In Love
Not Sure

You may also like

More in:Latest News

Leave a reply

Your email address will not be published. Required fields are marked *