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EUR/USD Forecast 19/12/2013

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EUR/USD Chart 19 Dec 2013
3/5 of 2 ratings

The fundamental outlook has improved markedly after yesterdays FED meeting.

As of right now we favor buying puts on a break below 1.3650. The pair has moved lower in the aftermath of the Federal Reserve's decision to start tapering their purchases of government bonds and mortgage backed securities.

Why is it good for the US dollar? Well because the FED finally belives that the economy can be stripped of stimulative monetary policy that has beern weighing on the US currency for the past years.

We are very likely to see it move lower if it manages to break the technical support level on an hourly basis. However we advise caution to trade only during liquid market conditions. If it happens during the Asian session we would be OK with it.

Right now liquidity is very thin and markets are getting into holiday mood. Tomorrow will be the last liquid day of the year. We could see very little moves during the holidays. While markets remain open we will keep advising you though.

Th EUR/USD binary options forex pair has remained more or less sidelined today. It attempted to rebound somewhat from late Asian trading lows at 1.3650, but that attempt faltered after we reached the 1.3690 level. what followed was a lackluster session that made binary options traders anxious for more volatility.

Since holiday mood is setting in we see volatility subside, but we retain a bearish balance on the pair as we believe the fundamental outlook has shifted after yesterday's FED decision to reduce their stimulus. So for now we keep a close eye for a break of 1.3650 and we will buy daily puts should that happen.

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