The article is about how the money people in charge of America (the Federal Reserve) decided to make it cheaper for businesses and families to borrow money. This made the value of the dollar go down compared to the euro, which is money from another country. The writer also talks about some numbers that show how fast prices are going up and how many people have jobs. They think things will get better but still need to watch the prices. The article ends by talking about what happens when people trade dollars and euros in the future. Read from source...
- The author does not provide any evidence or sources to support his claims about the Fed's decision and its impact on EUR/USD. He seems to rely on his own opinions and assumptions without verifying them with data or expert views. This makes his analysis less credible and trustworthy.
- The author uses vague and ambiguous terms such as "relatively optimistic", "balanced" and "risks to expectations". These words do not convey any clear meaning or insight into the Fed's outlook or the market reaction. They are also subjective and open to interpretation, which may lead to confusion or misinterpretation by readers.
- The author mixes technical analysis with fundamental analysis without explaining how they relate to each other or why he uses both methods. He also does not provide any historical context or comparison for his charts or indicators. This makes his analysis incomplete and unreliable, as it does not account for other factors that may affect the currency pair's movements.
Possible scenarios for EUR/USD in the short-term are as follows:
1. If the Fed's interest rate cuts are more aggressive than anticipated, or if economic data shows a sharper slowdown than expected, the EUR/USD pair could rise further, reaching 1.10 or even higher. This scenario poses a high risk of losing capital due to increased volatility and uncertainty in the market.
2. If the Fed's interest rate cuts follow the planned schedule, but economic data remains strong, the EUR/USD pair could consolidate in a range between 1.08 and 1.09 for some time. This scenario poses a moderate risk of losing capital due to market fluctuations and potential price swings.
3. If the Fed's interest rate cuts are less aggressive than planned, or if economic data shows signs of improvement, the EUR/USD pair could decline further, reaching 1.07 or lower. This scenario poses a low risk of losing capital due to reduced volatility and increased market stability.
Considering these scenarios, I would recommend investors to:
- Hold long positions with stop losses at 1.08, aiming for a target of 1.09 or higher if the first scenario occurs.
- Exit short positions with take profits at 1.07, anticipating further downward movement in the pair if the third scenario unfolds.
- Monitor the market closely and be ready to adjust your positions according to the changing conditions and new information.