The EUR/USD currency pair has been showing a bullish trend in recent days, closing positively for four straight trading days. The currency pair is expected to continue this momentum and surpass the 1.08 barrier, according to economists at ING. However, they also warn of possible downside risks stemming from the upcoming FOMC announcement.
In this article, we will provide an overview of the current market situation and the potential impact of the FOMC announcement on the EUR/USD currency pair.
EUR/USD Bullish Momentum
The EUR/USD has been maintaining its bullish momentum, trading near the 1.08 level. This is due to various factors, such as comments from ECB President Christine Lagarde on inflation dynamics and the anticipation of the Federal Reserve’s interest rate decision.
Investors have responded positively to these factors, leading to an increase in demand for the euro and pushing the currency pair upwards. The bullish trend is expected to continue, with ING economists predicting that the EUR/USD will surpass the 1.08 barrier.
Downside Risks from FOMC Announcement
However, economists at ING also warn of potential downside risks from the upcoming FOMC announcement. The Federal Reserve is expected to make an interest rate decision that could have an impact on the US dollar and subsequently, the EUR/USD currency pair.
ING economists suggest that the FOMC announcement could trigger a recovery in the US dollar, leading to a decrease in demand for the euro and a weakening of the EUR/USD. As such, investors should be cautious and monitor the market closely during this time.
It is important to note that the FOMC announcement is just one of many factors that could influence the EUR/USD’s movement. Other economic events, such as the release of key economic data and geopolitical events, could also have an impact on the currency pair.
In conclusion, the EUR/USD currency pair has maintained its bullish momentum and is expected to surpass the 1.08 barrier. However, investors should be aware of potential downside risks stemming from the upcoming FOMC announcement. Other economic events could also influence the currency pair’s movement, and investors should monitor the market closely.