Investors expect the long-term decline of the US dollar
Yesterday Janet Yellen comments disappointed investors, which created conditions for a new wave of growth of the pair EUR/USD.
We have already noted that the pair has a good potential to strengthen, given the European currency is highly oversold on radical steps of the ECB and the US dollar is overbought on expectations on the Fed raising rates.
Earlier we heard the talks about the April increase, now we see softer versions of the monetary policy. This can set the tone for a long-term decline of the US dollar with the growth of the pair EUR/USD above 1.1500.
In this respect, a key step will be the publication of the report on employment change, published by ADP. If the indicator is weaker than expected, the pair EUR/USD will try to break through the level of 1.1350 and go higher.
How to trade
We would buy CALL options if the pair EUR/USD rises above 1.1325.
Target price: 1.1325
Close price: 1.1335
Expiry time: 20:00 GMT