In anticipation of the New Year, the main currency pair, it seems, has moved into a phase of consolidation within a narrow range. The euro/dollar is barely moving on Tuesday afternoon. The current quotation of the main currency pair is 1.0972, and is slightly higher than yesterday. There is almost no activity in the instrument, as there is no significant news. Tonight a report on US consumer confidence index in December will be published, but it is unlikely that the market reaction to this release will be pronounced.
During 2015, the euro fell in tandem with the US currency by slightly more than 9%. Not the worst situation, considering how strong the talks of parity were recently. Now these fears receded, to be replaced by ones of a monetary nature. This year the Fed started a phase of tightening in the monetary policy, and the big question is when the second interest rate increase will be. The more time will pass from the first increase, the more the euro is likely to climb higher.
In 2016, the spread between the monetary approach of the US Federal Reserve and the European Central Bank will remain broad - for at least another year, the ECB will be busy with monetary easing, and then with the process of stabilization of the achieved results. This means that the European currency will remain in a weak position from a fundamental point of view, although the technical picture is likely to give more than one reason for active trading. A year is still too long to establish a clear trading landmark. Let this be the corridor 1.05-1.12, seven trading figures is ample space for the annual variations.
RoboForex Analytical Department