The market is likely to experience a lot of volatility over the next few days due to the many unanswered questions.
- The EUR/USD started off strong on Monday, with an initial gap up, but then fell drastically to pierce the 50-Day EMA.
- However, it then rallied again, indicating that the market is all over the place and will continue to be.
- This is because of the uncertainty surrounding whether the Federal Reserve will raise interest rates this week and questions about the global banking system.
The market is likely to experience a lot of volatility over the next few days due to the many unanswered questions. The 1.08 level is important as a resistance level. If the Euro breaks above it, it would be a very bullish sign, but it’s probably only a matter of time before exhaustion sets in, especially if the Federal Reserve sounds hawkish on Wednesday. It’s more likely that we will find some kind of range in the market at this point.
The first sign of support for the Euro is the 50-Day EMA, but the 1.06 level is more important. If the Euro falls below that, it would be a negative turn of events and could lead to bullish pressure for the US dollar worldwide.
It’s a situation where there is a lot of noisy behavior, but with enough time, the market will probably settle into a more stable pattern. However, it’s unlikely to happen before the Federal Reserve meeting and statement. In the meantime, expect a lot of choppy behavior, and it’s probably best to approach this as a short-term trading environment.
As a trader, it’s important to remain cautious and flexible in this type of market environment. The Euro is facing uncertainty and volatility, and it’s challenging to predict how the market will behave. Therefore, it’s crucial to stay informed and keep an eye on the broader economic indicators and the Federal Reserve’s actions.
If the Fed does raise interest rates, it’s likely that the US dollar will strengthen, leading to a weaker Euro. On the other hand, if the Fed pauses or hints at a more dovish approach, it could lead to a temporary boost in the Euro, but it won’t last long.
Because of all this, the Euro is facing a lot of uncertainty and volatility ahead of the Federal Reserve announcement. The market is likely to be choppy and random in the short term, making it challenging to make informed trading decisions. Traders should remain cautious, stay informed, and keep an eye on the broader economic landscape to make informed trading decisions.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex brokers to check out.