Having spent the whole week selling off, EUR/USD has found a little support in the overnight currency markets. Having drifted as low as $1.0715 earlier in the week, we have seen a slight bounce. This bounce has happened before today’s speech by Fed chair Janet Yellen – due to take place in the early afternoon. Although not specifically penciled in as a speech about interest rate decisions this will not stop the markets from drawing conclusions.
The institutional perception is still indicating at least one, and more likely two, interest rate rises in the US this year. This means we could well see parity in EUR/USD at varying times between June and December. With this being the case, I would maintain my view point that any decent bounce seen in EUR/USD should be used as an opportunity to sell.