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EUR/USD Forecast 21 May 2014

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EUR/USD Chart 21 May 2014
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Federal Reserve's minutes make no surprise for the EUR/USD traders

All of you who have had an idea to trade on the EUR/USD binary options forex pair today, might still get a chance to do just that. The biggest news release of the day has just passed and we haven't seen big surprises, as the Federal Reserve has reinstated that it will be tapering its US bond purchases slowly as the economy keeps improving.

In our view the release is a perfect time to establish long trades at current prices around 1.3665. As the attached charts that we have provided are spelling we have seen a big fall today to test the bottom levels set last week at 1.3650. Prices have managed to mark a new low, but a break has not materialized.

That said, since it hasn't materialized today it doesn't mean that it won't happen tomorrow, or next week. We have seen a big rise in the value of the US dollar, however with the slowly increasing volatility we could be getting some renewed selling pressure on the single European currency as the next ECB meeting approaches.

It is widely expected that the European Central Bank will reduce it's key rates by 0.25% marking a tie with the Federal Reserve. If we look at the chart we have seen numerous attempts to break above 1.3730, however to no avail as the weakness of the euro fundamentals has weighed heavily on the price.

If we look at the calendar major data points from Europe are scheduled for the end of the week, until then there is a big possibility of seeing more of the same range, however traders hold be careful if we see a break above 1.3730, we could be in for a decent rally should that happen.

Tomorrow's data points are not worthy of ignoring, as we will be getting the preliminary manufacturing and services PMI figures from across Europe as well as the Weekly Jobless Claims from the US and the housing data which is very likely to pick up after the season slowdown in the winter.

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