Of late, the pair EUR/USD trades below 1.12. This is amid inflation within the Eurozone that had met expectations with 1.3% in headline and core CPI. Tensions in the Mid-East have been found to not have strong effect on markets. The US ISM Non-Manufacturing PMI is currently being eyed.
As the Euro and the Dollar is caught in a wedge or a triangle within the technical pattern, this strongly suggests lower volatility. However, up until the time that the pair chooses a direction, it will trend strongly. But the question is, to what direction?
Right now, the EUR/USD is trading above the Simple Moving Average based on the 4-hour chart. It is trading closer to downtrend resistance.
With Iranian General Qassem Suleimani killed after an airstrike by U.S. forces, Iran had retaliated by threatening the U.S. with 13 “nightmare scenarios” and had claimed that it is keeping close watch of American bases around the country.
A letter that strongly implies potential U.S. retreat from Iraq was disregarded by high officials and authorities. Delayed Military action has allowed recovery of stocks. Consequently, investors moved away from safe-haven assets, one being the U.S. dollar.