18 Sep 2013
EUR/USD consolidates ahead of FOMC, expect it to stay that way
FXstreet.com (London) - Lack of any market-significant Eurozone data has pushed the common currency into a period of consolidation. In line with most other currencies, EUR is sitting on its hands ahead of the Fed’s announcement this afternoon (or are EUR longs sat on their hands? Either way, figurative hands are being figuratively sat on). EUR/USD is down slightly on the day so far, at USD1.3349 having hit a high of USD1.3365.
For all intents and purposes, EUR/USD is trading flat ahead of the end of the FOMC’s two-day meeting, which concludes today. Markets are waiting to see whether the Fed goes ahead with expected plans to taper its monthly asset purchases.
As the ECB continues to maintain its loose monetary policy in contrast with the Fed’s less expansionary policy, expect to see EUR/USD trend down in the medium to long-term.
As with supposedly “priced in” expectations, the consensus trades at the norm. Should the Fed take a more dovish approach to the predicted USD10bn taper, expect to see EUR/USD test USD1.3450.
Should the Fed come in and taper more aggressively, or reduce its unemployment threshold from 6.5 percent, expect to see challenges to 1.3200 on dollar strength.
Either way, discounting the possibility of Angela Merkel being abducted by aliens before the Fed speaks, expect to see EUR/USD trading in a tight channel this afternoon.
For all intents and purposes, EUR/USD is trading flat ahead of the end of the FOMC’s two-day meeting, which concludes today. Markets are waiting to see whether the Fed goes ahead with expected plans to taper its monthly asset purchases.
As the ECB continues to maintain its loose monetary policy in contrast with the Fed’s less expansionary policy, expect to see EUR/USD trend down in the medium to long-term.
As with supposedly “priced in” expectations, the consensus trades at the norm. Should the Fed take a more dovish approach to the predicted USD10bn taper, expect to see EUR/USD test USD1.3450.
Should the Fed come in and taper more aggressively, or reduce its unemployment threshold from 6.5 percent, expect to see challenges to 1.3200 on dollar strength.
Either way, discounting the possibility of Angela Merkel being abducted by aliens before the Fed speaks, expect to see EUR/USD trading in a tight channel this afternoon.