The EUR/USD pair is one that has been very choppy for most of the year, and I believe that will more than likely continue to be the way. After all, you can think about several different times of the previous year that the market looked like it was finally ready to go in one direction or the other, but when you look at the monthly chart you can see that we have simply been bouncing around between the 1.15 level on the top, and the 1.05 level on the bottom. I don’t necessarily think that we will stay in this particular range for the entirety of the year, but it wouldn’t necessarily surprise me.
Looking at the overall economic landscape, the European Union still has a lot of questions to answer. After all, there is a very uneven amount of growth in the European Union, and that of course causes a lot of concerned that the European Central Bank will have to add stimulus again. They have even suggested that it’s possible, and that of course will continue to weigh upon the value of the Euro in general.
No Long-Term Opportunities
I believe that the market will be very short-term focused, simply because even though we have all of the issues in the European Union, we also have a Federal Reserve that seems to be basically making it up as it goes along as far as policy is concerned. Yes, we did get an interest-rate hike late in the year, but quite frankly it wasn’t overly convincing, and there are concerns of that may not be able to do it going forward. At this point in time, a lot of us in the Forex world are questioning whether or not they will be able to raise rates anytime soon.
This pair will be very data dependent as per usual, but with all of the high-frequency trading that is now found in this particular market, I think that we are still looking at short-term back and forth and for at least the first few months of the year, I believe that we will stay in this basic 1000 pip range. Later in the year, I think we may see a little bit of Euro strength, but I would be stunned to see the EUR/USD pair above the 1.23 level at the end of the year.
