- The euro fell during the early hours on Friday as we continue to see the US dollar put up a fight.
- Despite the fact that we have seen a lot of softer than anticipated economic numbers coming out the United States, it’s worth noting that the European Central Bank also suggested that they were going to be “data dependent”, meaning that they are not sure what they are going to do next.
- That means there is something for the Europeans to think about, and you might be seeing this play out in the currency markets right now.
Beyond that, we also have the Federal Reserve interest rate decision next Thursday, and while most people expect an interest rate cut, the reality of course is that most people will be paying more attention to the press conference in the statement than anything else, to get an idea as to how weak soft the Federal Reserve is actually going to be.
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Technical Analysis
The technical analysis for this pair has been sideways for several weeks now, after seeing a nice run higher. We currently see the 1.16 level underneath that significant support, and the 1.18 level above offering significant resistance. As we are trading right around the 1.17 level, we are buying definition right in the middle of the range. This tells me that this pair will remain neutral for a while, unless we get some type of impulsive momentum, but it’s very possible that we could stay in this range between now and Thursday, when we get that information from the Federal Reserve.
If we do in fact see the global economy starts to slow down, it might have people running toward the US dollar for safety, and I think that’s one of the big question right now that we need to pay attention to. I think the next week or 2 will be very important, and could set the tone for the next several months.
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