Talking Points:
- The Euro[1] continues to gain, helping to wipe away prior losses from the month of May. EUR/USD[2] has posed a bullish breakout above a key zone of resistance and is now finding sellers just shy of the 38.2% Fibonacci retracement of the recent down-trend. Next week’s one-two combo of the Fed on Wednesday and the ECB on Thursday look to be of critical importance to the directional movement in the pair, as well as USD[3] and Euro-pairs, in general.
- The US Dollar continues to move-lower, giving back prior gains. The big question around the US Dollar appears to be whether the Fed is looking at three or four rate hikes in 2018 at their rate decision next week. Markets have continued to expect a hike at next week’s rate decision, even throughout the period of risk aversion that we saw in the latter-portion of last month. What is more debatable, however, is whether we see one or two additional hikes out of the FOMC[4] this year (for a total of three, or four). This will be spoken to via the bank’s dot plot matrix at that next rate decision, set for next Wednesday.
- DailyFX Forecasts on a variety of currencies such as the US Dollar[5] or the Euro[6] are available from the DailyFX Trading Guides page[7]. If you’re looking to improve your trading approach, check out Traits of Successful Traders[8]. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide[9].
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