EUR/USD: Equilibrium levels are not maintained for long
|The pair maintains a prolonged balance around the 1,05 level and looks for the reason to find direction.
Although Jerome Powell statements were quite hawkish about the future behavior of the Fed, the market showed that it expected this. So it was not enough to give further boost to the US currency.
Yesterday's report that the existing low levels of the exchange rate limit the traders willingness to open new large positions in favor of the US currency seems to be confirmed.
In such an environment there are two possible scenarios.
The first is some new financial data that will be announced far enough than expected to be able to surprise the markets and give some specific direction to the pair.
The announcement of business activity in the German economy (IFO) and orders for durable goods in the United States are eagerly awaited.
Another possible scenario is for the market to temporarily move in one direction by executing stop loss orders.
Many investors fall into the trap of trying to take advantage of a limited trading range by trading the ends of these levels.
Placing Stop loss orders outside these levels, something that is very soon detected by large Hedge funds, resulting in a sharp breakdown of these levels and the temporary direction of the exchange rate.
In general we maintain the neutral position giving slightly higher chances to see the pair in lower levels
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