Trading in the month of May proved a fast downwards track for the EURUSD as financial institutions were forced to consider the potential of higher interest rates to come. See where June is headed
The EUR/USD provided traders lucky enough to be pursuing momentum downwards plenty of reasons to cheer.
While technical traders may try to explain the downwards price action of the EUR/USD based on graphical analysis and fancy lines and occasional triangles showing why the price of the currency pair moved so swiftly, there happens to be a fundamental reason why the EUR/USD has reacted with volatility lower.
The ability of the EUR/USD to break below 1.07000 briefly yesterday was another signal that financial institutions have been surprised, and are likely repositioning for more gyrations which will be caused by U.S Federal Reserve antics. The current price of the EUR/USD appears to have factored in the potential for a couple of more interest rate hikes from the U.S central bank.
The move lower the past few weeks have certainly been rapid, but it might have produced a significant amount of the overall declines which could start to slow down.
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