In December, the dollar weakened against the Euro. The biggest weakness came in February, where the pair moved from 1.1987 to a monthly high of 1.2531. Last month, the optimism in the US economy, the rise in volatility, the rise in government bonds, and the optimism for more hikes led the dollar higher, rising by 1.52% against the euro. This is summarized in the chart below.
What awaits the EUR/USD pair this month?
The main theme for the month will be the economic data from the United States. Traders will want to collate the data with the economic projections given by the Federal Reserve. Will the unemployment rate remain unchanged or will it improve? Will the economy add more jobs? What about inflation?
To predict the monthly price movement for the pair, one of the best method to use is the Elliot Wave. As shown below, from September to November last year, the pair went down by about 32 degrees and established a double bottom at the 1.1557 level. The pair then started forming an Impulse Elliot Wave pattern, which ended at the 1.2547 level. The pair is currently in the Elliot Corrective Wave area which could see it continue to go down. This month, traders should pay close attention to the 1.2057 level, which forms a support and the 50% Fibonacci Retracement level.