BTMU FX Strategy Research notes that there are a number of short-term metrics that suggest EUR/USD has overshot and therefore could correct over the short-term.
“There is the added element of increased volatility risk due to the potential lack of liquidity in the early part of next week due to US Independence Day on Tuesday. .
FOMC minutes will be released on 5th July from the June meeting when the fed funds rate was hiked. ECB Chief Economist Peter Praet will speak on Tuesday and his comments may be important following Draghi’s comments this week. We lean toward a bearish bias on the basis that the move this week may have overshot,” BTMU argues.
In line with this view, BTMU holds a bearish bias on EUR/USD next week but has widened out the range to 1.1150-1.1600 to highlight the risk that momentum could take this move further still in the week ahead and equally, there is scope for a notable correction back the other way.
Source: BTMU Research
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