Geopolitical tensions have been on the lighter side yesterday but the situation remains fragile.
As long as the risk of military conflict between Russia and the U.S. in Syria remains high, we may see a lackluster price development in the market which provides little profitable trading opportunities. Traders should therefore maintain a cautious approach.
The euro traded with a downward tilt following relatively dovish ECB minutes. The minutes highlighted the appreciating euro as a cause of concern for the economic outlook in the Eurozone, as well as the risk of trade conflicts. While we anticipated short-term bullish sets after a test of either 1.23 or 1.2250, the price action in the EUR/USD remains more or less range bound despite the primary bullish trend.
Technically speaking, we now expect the euro to trade between 1.2380 and 1.2250. If the euro drops below 1.2280 it could be headed for a test of 1.2250/20. Whether we will see some more volatile (and hopefully more profitable) market movements in the Forex market will depend on the market’s risk appetite for currencies.
The pound sterling caught a bid and rose back above 1.42 following a test of the potential support level at 1.4145. We now expect the GBP/USD to trade within an upward trend channel between 1.43 and 1.4190.
The only piece of economic data today will be the release of the University of Michigan Sentiment at 14:00 UTC.
With the focus being on news on Syria, traders should stay alert to possible changes in sentiment but as long as the risk appetite among investors is low, trading might be quiet.
We wish you a nice and peaceful weekend.
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