Daily Forex Reports | by FX Empire | Tuesday, 16 February 2016 07:07 UTCThe EUR/USD pair fell significantly during the course of the session on Monday, in reaction to Mario Draghi suggesting that the European Central Bank could very well work against the value of the Euro as there are a lot of concerns with the marketplace now. The banks are starting to get sold off drastically and in the European Union, and with that it’s very likely that the ECB will have to step in and do something to protect the fragile recovery that we have seen coming out of the EU.
On top of that, the Germans will have to approve anything that’s done, but typically they fall in line after raising some concerns. Ultimately, it’s very likely that the ECB will do whatever it takes and therefore Forex traders are going to be a bit concerned about the future of the Euro in general as the market will continue to be very volatile.
Keep in mind that the Federal Reserve has recently suggested that they cannot raise rates anytime soon, so having said that we have 2 central banks that are going to be fighting a bit of a currency war, so expect a lot of volatility regardless what happens. We believe that the 1.1050 level below should be supportive, as it was previously so resistive. Ultimately, this market has quite a bit of support but at the end of the day we are still at very low levels for a good reason.
We will pay a lot of attention to the 1.1050 level as a potential supportive candle there could be reason enough for buying to happen, having said that. One thing that we think we can count on is going to be a lot of back and forth trading as both central bank leaders are more than likely going to be jawboning the value of these currencies, so short-term traders will probably be attracted to this market. As far as longer-term trading is concerned it’s almost impossible to be involved and risk any real amount of money in this type of situation.
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