EUR/USD: Euro lost some ground after the Fed – What's next ?
|The single European currency is moving above 1,18 in the early hours of Thursday morning, trying to return to higher levels as yesterday's stormy day had intense volatility in the wake of Fed's decision to reduce key interest rates by 25 basis points.
In an environment of intense volatility, the European currency climbed above the level of 1.19 but was soon called into question, losing most of the gains and with the opening of Europe today the exchange rate had fallen slightly below the level of 1.18.
The trigger for the change in momentum was the speech by Fed Chairman Jerome Powell that followed the decision, in which he appeared much more conservative about the next rates cuts than the market would have expected.
The market's behavior seems to have partially confirmed my thoughts as they were reflected in previous articles as I had the assessment and intention to buy the US currency at some new peak and before the 1.20 level.
Although the European currency has maintained a mild upward momentum recently and especially in view of the Fed's decision, the continuation remains unclear and I have doubts about the ability of the European currency to easily break the 1.20 level and remain above it in the very near future.
And today's agenda is quite interesting with Christine Lagarde speech and BOE's decision on interest rates stand out.
The scenario of the exchange rate entering a consolidation environment before changing any significant levels remains a good possibility and I would maintain the position in favor of the US dollar for now, aiming for a larger correction.
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