From a technical analysis perspective, the market is approaching the critical 50-day exponential moving average, which calls for heightened vigilance by traders.

  • The EUR/USD posted a slight initial decline during Wednesday’s trading session in light of the Federal Reserve’s impending interest rate decision. Such uncertainty usually triggers some volatility in the market, yet it is believed that a definitive solution will emerge soon.
  • The European Central Bank is widely expected to announce a rate hike on Thursday, adding another layer of complexity to market dynamics.
  • As a result, the direction of the market will depend not only on Federal Reserve decision, but also on the subsequent statement that they will publish.

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From a technical analysis point of view, the market is moving towards the critical 50-day exponential Moving average, which requires increased vigilance from traders. A break above the previous session’s candle high on the day’s close could catalyze a significant market move. This scenario requires careful consideration of potential actions by the Federal Reserve and the ECB. Traders must decipher whether the Federal Reserve will take a more aggressive stance or whether the ECB’s decisions will dominate the day.

The 200-day EMA, which coincides with the uptrend line, serves as a pivotal point of interest. The trajectory of the market depends on whether the uptrend can continue. Given the current technical indicators, the possibility of sustained growth is convincing. However, traders should approach this analysis with the potential value offered by the decline. Only time will tell at this point, but the markets are sure to be volatile and should make a confirmed decision.

A significant move could occur if the market reverses and breaks below the 200-day EMA and uptrend line, especially at the 1.07 level. This event could catalyze a quick market reversal, potentially triggering a decline to the 1.05 level. Conversely, a break above the previous session’s high at the daily close could push the market to the 1.10 level. This was high from the previous bull moment.

At the end of the day, the euro’s near-term trajectory is intricately tied to upcoming Federal Reserve and ECB decisions. Traders must carefully monitor these developments and their market implications. Technical analysis suggests a potential uptrend, but a drop below key levels could trigger a quick change in market sentiment. As always, in such volatile times, informed decision-making based on a thorough understanding of market dynamics and technical indicators is paramount.


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