The EURUSD will begin this week slightly above the uncomfortable lower price levels seen on Friday- Forex Trading
mirrored the broad market and saw the currency pair move lower in a rather steady manner as it made support levels look vulnerable. After reaching a high of nearly 1.09060 on Tuesday of last week and potentially igniting optimism that the EUR/USD would again challenge higher levels, the opposite occurred as the currency pair began to sell off in a rather progressive fashion.
The EUR/USD will start this week’s trading near the 1.08060 ratio, after touching a low around the 1.07600 level late on Thursday and again on Friday, before providing a slight reversal higher before going into the weekend. The EUR/USD is suffering from the same plight many major currencies face against the USD, a lack of clarity regarding U.S Federal Reserve interest rate policy in June. To make matters additionally nervous, the Fed’s FOMC Meeting Minutes report will be issued this Wednesday which could cause a storm for the EUR/USD and other currency pairs.If the FOMC Meeting Minutes on Wednesday are not enough to make financial institutions nervous this coming week, the U.S. debt ceiling talks continue to remain a political fight and this could be causing additional risk-averse trading. Manufacturing and Services PMI numbers will come on Tuesday from the U.S. and Europe too. Global financial institutions remain nervous regarding economic outlooks because of stubborn inflation and recessionary fears. The U.S. will also publish Gross Domestic Product numbers this Thursday.is trading at one-month lows and the 1.08000 support level should be watched early this week. The lows late last week which touched values not seen since the last week in March are troubling but might be seen as a place by speculators to try and ignite buying positions.interest rate outlook for June remains unclear and economic data this week could deliver more insight. While many believe the Fed should pause interest rate hikes, if inflation remains problematic it will put the U.S. central bank in a difficult position. The Fed may also take into consideration the result of U.S Banks' Stress Test results as they worry about the mid and small-size corporate banking sector.Traders who were looking for a strong reversal upward last week certainly were disappointed. The ability of the EUR/USD to briefly climb above the 1.09000 level may have caused optimism, but it was quickly stopped as a move downwards grew stronger and support levels faltered. If the 1.08000 remains in sight in the middle of this week, this could be a rather negative sign and mean the EUR/USD could traverse lower. Early trading this week may stay rather consolidated until the publication of the FOMC Meeting Minutes on Wednesday. Economic data from Europe and the U.S. on Tuesday should be watched too. Choppy conditions for the EUR/USD may ensue this week as financial institutions try to find equilibrium . Many traders and financial houses may believe the EUR/USD should be higher, but short-term considerations are often different compared to mid-term outlooks. The lack of clarity from the U.S. Federal Reserve is causing nervousness, and until a firm conclusion is developed regarding the outlook regarding the near-term Federal Funds Rate decision, volatile trading is likely to remain. Traders are tempted to look for upside reversals based on the assumption the worse of the ‘news’ is known is wagering . Economic data remains troubling from Europe and the U.S., and if inflation continues to ebb higher the U.S. Fed may feel forced to raise interest rates again in June. Traders should not be overly ambitious this week and remain conservative regarding their targets for the EUR/USD. Resistance near the 1.08500 to 1.08800 ratios should be watched, sustained trading above the 1.08600 mark late this week would be a positive sign for EUR/USD bullish perspectives.
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