The main currency pair updated its highs and continues growing to reach new ones.
Right now, investors’ attitude to the USD is negative, and “as the days grow longer, the storms are stronger”. The market has been buying the Euro not because it’s very stable and the Eurozone economy is strong, but because the USD is not liked by anybody right now. The current quote for the EUR/USD pair is 1.2050; it’s the highest level since January 2015.
The market ignores both the statistics and events; it is focused on the lack of interest to the American currency, which is the result of the symposium in Jackson Hole, Wyoming, the USA, featuring the world’s leading monetary politicians. During the event, Janet Yellen, the Chairwoman of the Federal Reserve, was shy away from all important monetary issues and talked about the regulation. In the meantime, investors expected some hints at the time when the Fed was going to decrease its balance.
At the moment, expectations of the third rate increase this year are 32.9% against 40% last week according to the CME futures. Besides, expectations about the key rate increase in 2018 were moved from spring to summer.
Basically, all these are good reasons to sell the USD and they don’t look too unexpected. But as a rule, the market needs only a reason, and t will do everything else by itself.
The current market situation might as well allow to buy the EUR/USD pair with the stop at 1.22, unless some serious reasons for the pair to get stabilized appear earlier.
RoboForex Analytical Department