The Euro is trying to make a comeback, but will it succeed
The Euro currency is attempting to make a comeback and test the highs of its recent weeks range against the US dollar, however its success will depend on a variety of factors like the outcome of the Federal Reserve's minutes later tonight and the sentiment of the market towards future interest rate rises.
The Euro currency has been threading water for the past 24 hours when compared recent volatility in the forex markets. This is possible to persist until the end of the day, however with the event risk of the Federal Reserve's minutes from the monetary policy committee's last meeting, we could see some moves.
This however does not concern our analysis today, as we will attempt to gauge the direction of the market in trading tomorrow. With an expiry rate at 20:00 GMT, we would be targeting to buy daily calls should the price drop towards 1.2650 in the coming hours.
We can see this happening later today or sometime tomorrow - it doesn't really matter because of our scope for the expiry being set to tomorrow evening. There is a second scenario which would trigger a call buying opportunity - this is an hourly close above 1.2690 on the charts.
The Euro has been correcting its recent downfall since Monday, as the EUR/USD binary options forex pair has shed quite a lot of value in recent weeks. The US dollar has rallied quite vigorously, however we think that there is an end to every huge rally such as this one, so we choose to play for a corrective pullback.
That said we still need to see where our trade would be invalidated and at this point in time we would say that a close below 1.2620 on an hourly basis would result in a dramatically lower probability for the pair to continue higher.