The foreign exchange market is undergoing dramatic volatility. The EUR/USD pair is particularly lively, with tight spreads and fast execution. Monday proved an exception as the climb in the EUR/USD resumed falling back to the 1.1650 range. Given these recent developments, skepticism still remains about what is driving its success and this downward trend.
The EUR/USD pair bears one of the biggest weight overall thanks to a reassertion of US Dollar strength. Further, analysts have been quick to point out that the dollar’s recent resurgence is adding to the bearish pressure on the euro. Consequently, traders now want to see EUR/USD find firm foot again.
The US Dollar has the largest impact on market sentiments. At the same time, continued talks for a possible EU-US trade deal are influencing investor perceptions on the market. The ambiguity around this deal has added significant bearish pressure to the EUR/USD pair. Most investors are still playing it safe as they look to gauge how these negotiations will affect the trading environment moving forward.
At the same time, GBP/USD pair has drifted down closer to 1.3400 level. But try as it might to get positive traction, it beat back every ounce of momentum given the dollar’s substantive strengthening, aka the big bad news. Behind the performance of GBP/USD is a much bigger story in the currency market. More importantly, it shows how most all currency pairs are struggling to hold ground against the increasingly dominant US Dollar.
Retail traders are having their way with one of the most powerful trading platforms on the street, MetaTrader 5, equipped with advanced analytical tools and features. These platforms provide instant, seamless execution of trades helping busy professionals react quickly to changing global conditions. The competitive spreads linked to EUR/USD trading make it all the more interesting for a trader seeking to take advantage of changes in the market.
As the week progresses, players in the market will be looking more closely at key economic indicators. They’ll be watching economic data and geopolitical developments to influence EUR/USD and GBP/USD. Understanding the impact of volatility and shifts in dynamics between these currency pairs will be key for traders who want to position themselves to thrive in today’s market.