EUR/USD Price Forecast – Euro rallies ahead of the Federal Reserve meeting

The Euro rallied a bit during the early hours on Wednesday as the world awaits the statement from Jerome Powell. At this point, we are still in consolidation, and the next move will be based upon the tone of the statement.
Christopher Lewis
EUR/USD daily chart, December 20, 2018

The Euro has been trading back and forth in a relatively tight range for some time now, showing the usual chop that you see in a market that is dominated by high-frequency traders. At this point, the market looks likely to continue to see a lot of resistance at the 1.15 handle, an area that not only is psychologically important, but an area that has shown itself to be important more than once. If there is a reaction to the upside, it will probably have more to do with the Federal Reserve sounding a bit more dovish than anticipated. It certainly won’t have anything to do with the European Union, which looks weak at best. Global growth around the world seems to be struggling, and it looks likely that the US dollar will continue to show strength due to fear.

Euro to Dollar Forecast Video 20.12.18

The 1.12 level underneath has been supportive, just as the 1.11 level underneath has been. The market continues to be noisy, and as we head into the holidays, it’s very likely that we will continue to see choppiness in a short term range. I think that the market is going to be hard to trade from a longer-term perspective after this announcement, because most traders will step away and start to focus on the holidays. There is a seasonal strength to the US dollar due to the lack of dollar funding occasionally, but at this point I’m not expecting big moves. I believe that the Federal Reserve will do everything it can to split hairs.

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