- Speculators may not have pleasant memories of EUR/USD price action. Having essentially finished April near the 1.13600 vicinity and after touching lows around the 1.10680 on the 12th of May, the EUR/USD is now around the 1.13465 mark as June gets ready to begin early tomorrow. Price velocity in the EUR/USD and other major currency pairs has been violent and day traders have certainly paid a price if they have not been using proper risk management.
- There will certainly be some day traders who brag about winning positions achieved in May with the EUR/USD. However, those that lost money due to volatility in early May could outnumber the victors. The EUR/USD has been able to achieve a significant move higher since late in the second week of May, but it has not happened easily. The EUR/USD now finds itself around prices it started the month of May, but optimistic speculators who are bullish naturally may believe higher ground will start to be challenged.
Global Forex has been in flux for a handful of months as financial institutions have tried to become comfortable with President Trump’s rhetoric, which has a tendency to cause angst in the markets. Volatility has been dominant and folks who believe the broad markets will suddenly turn calm and remain comfortable may be counting on too much tranquility. However, President Trump did reverse his tough E.U tariff stance last wee and announced a delay until the 9th of July because progress has been made in talks.
The 1.14200 ratio was seen briefly last Monday, but by Thursday of this past week the 1.12240 vicinity was being tested. Yes, this was followed in the last day and a half of May’s trading with gains, but did day traders survive the volatility? Lessons about risk management are important and traders who carry the notion that the EUR/USD is safer to speculate on compared to less significant currency pairs have been reminded that price spikes does exist in the EUR/USD too. The vision of 1.15000 values in the currency pair which were seen on the 21st of April are legitimate, but may prove to be a distance too far for many.
Traders should continue to brace for more price velocity in the coming days and weeks in the EUR/USD. The drama caused by the U.S White House and reactions in Forex and global markets are real. Fundamental outlook is considering the notion that the U.S Fed may be in a position to cut interest rates even as they preach the word uncertainty in July.
- U.S inflation data has been lower than expected, so some financial institutions may believe lower borrowing rates will start to be seen.
- If global markets remain cautious this could produce more choppiness in the EUR/USD, but the ability to go higher is attractive for traders who believe USD weakness will continue to be seen.
Before traders can dream about the 1.15000 price level on April the 21st being seen again, first they must be able to grasp and hold onto the 1.14000 ratio. During the month of May almost all price action was well below this mark. The 1.14000 will be a goal of financial institutions with a positive outlook, but first the EUR/USD must prove it can sustain prices above 1.13800.
The EUR/USD has shown a definite capacity to trade fast and produce rather surprising fluctuations. The past handful of months in the currency pair have ben dramatic, but if a six month chart is looked at there is a bullish perspective that exist. The desire to pursue upwards momentum in the EUR/USD is legitimate, but it needs to be done cautiously because downside action has proven fast and costly.
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