EUR/USD treads water ahead of Fed comments

Having charged up to and over the 1.38 level, the EUR/USD currency cross has decided to pause and wait for today’s US economic data releases.

The solid trend of a strengthening euro against the US dollar has, at least for the moment, come to a halt. Currency traders are looking to gauge a little guidance from today’s US data. And the bigger question still remains about when the Fed will decide to embark on reducing its current monthly $85 billion quantitative easing policy.

Coupled with the question mark over US fiscal policies this year, we also have looming resistance from the longer-term Fibonacci retracement levels, as outlined in Brenda Kelly’s article earlier this week. 

Certainly, in the short-term, the bullishness of EUR/USD traders has fallen well short of the optimism required to break Brenda’s 1.3833 level. The driving force behind this move is the ongoing devaluation of the dollar, as the Fed continues with its planned printing of money in an effort to help stabilise markets. Any pull-back from these levels could well be short-term, as the overriding issues will continue for some time to come.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.