Foreign Exchange (Forex) is the biggest market in the world. Every day more than $5.3 trillion worth of transactions are performed. There are hundreds of pairs for them to trade. The EUR/USD pair is the most active pair in the world and one of the closely watched. This is because of the level of trade that goes on between the European Union and the United States.
This year, the pair started by gaining – meaning the euro strengthened – mostly because of the uncertainties coming from the US. The pair rose to a high of 1.2411. In the past few weeks however, the pair has erased the gains made early in the year, falling to a YTD low of 1.2050. This is after the euro weakened following dovish statements from the ECB.
This week, this pair will be a major mover because of the amount of news we expect. Today, the EU finance ministers will hold a meeting. This meeting will come after the German and France leaders visited the United States. As such, the issue of trade will likely be discussed and how the region will react to US tariffs.
On Wednesday, ADP will release the jobs numbers. On the same day, the Fed will release its interest rate decision and the accompanying statement. On Friday, we will get the official employment numbers from the US. In addition, we will receive inflation data from the EU. As such, all this information will make the pair very volatile during the week.
There will be two likely scenarios. First, a decreasing inflation rate from the EU may lead the pair lower as the urgency for a rate hike is removed. On the other hand, a hawkish Fed, coupled with better employment numbers may see the pair continuing with the downward trend.
The post EUR/USD Technical Analysis: The Likely Scenarios in a Busy Week appeared first on Forex.Info.