EUR/USD Price Forecast – rumors abound about rate hikesThe Euro has been very volatile during the day on Tuesday, dropping down towards the 1.17 level before rallying again. Initially, one of the ECB members mentioned that summer time 2019 is the earliest that you would see a rate hike, but since then it has been suggested that some of the other members are much more hawkish. In the end, we essentially are recovering the losses and not much is changed.
It appears to me that the Euro is trying to form a bit of a “double bottom” on the hourly chart around the 1.17 level, which coincides with the 200 EMA on that same timeframe. The rally was very significant and very quick, but is based upon rumor and speculation, not upon hard concrete facts. Because of this, it would not surprise me at all to see this market just stop in this area, as a lot of traders will be very cautious about putting a ton of money to work in an environment that seems to be rife with rumor more than anything else.
Welcome to the age of machine. I’d be willing to bet most of my trading account that a lot of the reaction in the currency markets to the suggestion that some members aren’t ready to give up on the idea of raising rates soon was reacted to buy machines reading twitter feeds more than anything else. I think for the most part, we are in a “waiting and see” type of environment. However, I would say that we have been in and uptrend for most of the last couple of weeks, so I’m definitely much more comfortable buying than selling. The 1.1850 level above is the top of the overall consolidation, so that makes a nice target.