Today's currency pair to watch is EUR/USD. Yesterday, the euro recovered in forex trading to above 1.4000, but the 16-nation currency appears to be stalling out. Indeed, the euro is slightly lower against the U.S. dollar in currency trading.
Going forward, the euro forex trading forecast has two main considerations. GFT's Kathy Lien addresses the two barriers to a strong euro in FX360:
It will be important to watch the short to medium term moves of the euro. While euro is expected to strengthen in the long run, it may find its gains in fits and starts for the time being.Such a strong breakout can usually have follow through but there are 2 main hurdles that the EUR/USD
has to overcome in the next 24 hours. The first is the 12 month ECB refinancing that we talked about on Monday. The refinancing is seen by bond traders as a quasi quantitative easing effort by the ECB because the operations are most likely going to be collateralized by government bonds which can then be posted as collateral to the ECB for funding. Weber even noted that “no additional policy steps are needed” after tomorrow’s refinancing. The second is the Federal Reserve’s monetary policy announcement. We do not expect any fireworks but EUR/USD
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