Forex For The Week Of February 24, 2014 – A Love Lost
The Forex markets continue like the psychotic half of its missing twin, to display some of the characteristics we have been covering recently. For proof take a look at the behaviour of the EUR/USD. This pair is one that most traders pay a lot of attention to and if you have been looking for more than a handful of pips, you need to keep looking. The pair continues to show a lot of consolidation, with its inability to get above the 1.38 level, or fall below the 1.35 level. Although it is in a 300 pip range, the movement hasn't been fluid at all. If you are a longer-term trader, this has been a market that has been almost impossible.
The pair shows just how difficult it has been to trade the Euro lately, and this is true in several other Euro-related pairs. Because of this most traders have soured towards this pair. Until the Federal Reserve and the ECB become a bit more convincing in their plans and whether or not they even have any, expect more of the same.
The GBP/USD pair had a negative week, but after seeing the breakout the previous week, it wasn't a big deal. Quite frankly, we feel that this pair is going to find support below, and more than likely struggle to get any lower than the 1.65 level. The area continues to attract buyers in our opinion, and we still believe that the pair will go to the 1.70 level, given enough time. The US Dollar will continue to be relatively strong, so any move higher will be slow in our opinion. However, the British Pound is certainly favored over the longer-term.
We essentially believe that the markets will continue to be a bit slow over the next week, and as a result believe that short-term trading will continue to be the best bet out there. We are not looking for longer-term moves yet, but once we get an impulsive candle, we'll be willing to evaluate the market again.
Monday: German IFO
Wednesday: UK GDP
Thursday: US Core Durable Orders m/m, Unemployment Claims
Friday: CAD GDP, US Prelim GDP, US Pending Home Sales