The EUR/USD currency pair is holding some haven gains under 1.0850 level in early European trading on Monday. Traders and investors are widely watching this pair as it shows more consistence on overall stabilization as the best forex pairs. Their performance is certainly one to watch, given the possible changes that may be seen in response to upcoming economic data releases and major geopolitical developments.
On Monday, the EUR/USD opened under 1.0850. It remained range bound for much of the morning session in Europe. Market participants are understandably excited by this stability. They are intentionally curious about what is motivating this behavior. The currency pair has been a good barometer of the direction of our economic headwinds. Moreover, it is indicative of investor sentiment across the Eurozone as well as in the United States.
The EUR/USD’s future direction will be determined by several key variables. European and U.S. economic indicators are a heavily weighted influence on this. Investors are especially on edge ahead of next week’s euro-booster data that will determine if the common currency makes any headway against the dollar. Traders are always watching GDP, CPI, and jobless claims. These three major data points serve as a guide in determining which direction we may see currency pairs go.
In recent weeks, geopolitical developments have helped to steer the EUR/USD’s path of least resistance. Trade talks and other political developments usually trigger sharp movements in currency markets. These new realities are met with an immediate and blinding response from investors. On Monday, EUR/USD was largely range bound. This reveals that players in the market are being more risk averse as they wait for further clarity on these important questions.
Throughout the trading day today, analysts will be looking for flashes of major news that could swing the EUR/USD in either direction. Market sentiment can change in an instant based on breaking, unforeseen news, creating wild swings in currency pairs. Thus, traders are once again strongly encouraged to stay on their toes and keep a watchful eye toward the global economic and political landscape.