By: DailyForex.com
The EUR/USD pair rose during the session on Wednesday as the markets continue to show an anti-Dollar bias. This is predicated upon the Federal Reserve refusing to taper off of quantitative easing, which of course works against the supply and demand curve when it comes to Dollars. This also should work in favor of the Euro, as it is where traders goes first when ditching the greenback.
This pair broke above the 1.35 level for the session on Wednesday, which was a psychologically significant number of course, and a natural place for more buy orders to be placed. With this in mind, I fully expect the pair to reach the 1.40 level in the near-term, although I suspect that the action will be choppy at best, just as the pair has been since the financial crisis began a few years ago.
Watch EU economics numbers
Now that we know that the Federal Reserve isn’t going to taper, the economic numbers out of the European Union become much more important. The Europeans just exited a recession, so as those things tend to do – it generates demand for the Euro overall as more and more investors clamor for stocks in places like Italy, Spain, and Germany.
The markets in all of those countries have been doing well, and I suspect that money will continue to flow from left to right on the Atlantic, as people continue to look for yield in a low-yield environment. The Euro should continue to outperform the Dollar as the Federal Reserve has shown its willingness to keep the spigot open when it comes to printing and easing. Because of this, I believe that every time this pair dips, it’s a buying opportunity and that selling is a fool’s game at this point.
This market will continue to be bullish into the next several weeks or even months, but we need to break above the recent highs in order to have a decent buying signal at this point in time. This market should eventually do so, and at that point in time I am more than willing to buy.
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