Most analysts expect the U.S. dollar to remain within recent ranges over the next few months, as FX players remain sensitive to upcoming economic data and Fed policy shifts. In the wake of the dollar’s strength vs. the euro, which has dropped the euro to the $1.19 area in early August, a risk remains for disappointment if the data comes in weaker than expected or if the Fed hikes at a slower than expected pace.
Analysts call the current environment “data-driven,” as opposed to a technically-trending marketplace. FX traders will need to watch upcoming economic reports closely and be prepared for nimble trading within the recent ranges, as prices fluctuate back and forth within the larger $1.17-$1.24 range that has confined the euro from late April to late September.
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