Wednesday, June 20, 2012

Forex outlook on June 20th 2012

The Euro despite the worsening situation in Spain climbs above $1.27, as investors are waiting for the Fed's policy meeting that will give conclustion on wednesday.
The Euro increased from $1.257 last monday to $1.27 on tuesday and attention will be turned to US for the next 2 days as this monetary-policy meeting will decide whether the central bank should continue its easing monetary policy of buying long-term debts adn selling short-terms debt, every change to ease the interest rate is usually resulting in a negative effect on the dollar, but in the short-run dollar correction will happen at the end of the two days meeting.

Recommendation: Pay attention to EURUSD on thursday when the monetary-policy meeting and take further decision according to what they agreed:
-ease in interest rate: buy EURUSD as it as a negative impact on the dollar

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