Many readers have wrote to me asking me what is wrong with the US dollar. The long green candle in the hourly EUR/USD chart left them astonished!
Well this is an important reminder ( nag alert! ) that trading forex is never about deciding to push the long or short / buy or sell button. You have to be aware of what is due the week ahead as any unexpected development may just put a spin to your forex trading plans. Like now! For our members, I hope you have been making use of the economic calendar in your dashboard. That is a gem for your forex planning. ( psst. We use it too 😁 )
Looking at the EUR/USD hourly chart above, we see the long green candle everyone is talking about. Coming off that, the currency pair is now consolidating near 1.14. You can expect possible movement once the dust settles down and investors look onwards for the next big thing. As of now the bullish momentum looks like it has been stopped in its tracked but it’s too early to tell. Do drop to shorter time frames so that you can get insights as to whether the EUR/USD will stage a bearish recovery.
Doves say hi
The current situation is probably falloff from a dovish comment made by the US Federal Reserve chair Jerome Powell. He mentioned that the current interest rates are just below neutral. The Big Bang is that apparently he had only just mentioned in October that the monetary stance is a long way from neutral! That is pretty fast a change of the US Federal Reserve’s outlook.
Many investors see the comment as a primer to an end or pause of interest rate hikes. Considering that high interest rates usually results in a currency to be in demand, the very suggestion that hikes may be stopped probably impacted sentiments.
On the other side of the fence with the possibility of a pause in monetary tightening by the US Federal Reserve, riskier assets such as equities rallied. This may also add lift to the euro as investors trade US dollars for the euro currency so as to invest in European equities.
G20 meetings are just around the corner. Much focus is on President Trump and Xi’s meeting. Get ready for a possible bumpy ride. Beware of forex gaps over the weekend and practice proper money management. Members do log in to your dashboard to monitor the economic calendar and forex heat map ( for signs like a drop of US dollar across all majors ).Get the latest EUR/USD and AUD/USD forecast on our FREE Android app. Download Here Don't miss out! Get your FREE forex trading ebook and be notified when new forecasts are released! We think you may be interested in these articles.