The EURUSD pair initially tried to rally during the last week but by end of the week it sold off quite significantly due to the greenback’s strength.
The coming week will be dictated by expectations on the US monetary policy on Wednesday by the rate-setting FOMC, just as the past week was dominated by Thursday’s US inflation data and the latest meeting of the European Central Bank.
This means low volatility is expected for the EURUSD pair before the Federal Reserve’s monetary-policy announcements, economic projections, and press conference. Furthermore, the Fed’s meeting may well have as little impact as the ECB and inflation numbers did, suggesting little movement in the pair during the week.
Really, just as some investors in the markets were disappointed not to hear any hints on when the ECB will begin tapering its various monetary-stimulus programs, the Fed could be equally disheartening, and traders left with no room to trade. While nobody expects the FOMC to change interest rates, a hint that it might reduce, its current stimulus program at some point in future cannot be ruled out entirely but seems doubtful.
So the EURUSD is expected to continue to trading sideways to bearish as volumes and volatility continue to slow ahead of the Summer holidays but.
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