Was just looking to get the opinion of some of you more experienced traders. The way that I interpret the news that Europe is potentially going through deflation (meaning not enough inflation) would mean that Europe may be thinking about increasing the amount of Quantitative Easing to bring inflation numbers in line, right? Wouldn’t that position it to be trading lower vs. the USD (on a fundamental level) since we are aware that the Fed plans on continuing to taper down QE stateside? Personally I feel like the €/$ is oversold at the time of this post ($1.3390), but I just wanted some thoughts on what you guys think.
On a different note, i’ve been in somewhat of an awe how the market lately has seemed to be “shrugging off” economic news or stock market movements and just doing its own thing…
Thanks in advance for your insight ^___^
QE and low rates are supposed to support the economy by motivating banks to lend more and consumers/businesses to borrow more. Theoretically, this could have an inflationary effect, but as we saw with the U.S., the effect isn’t always what was expected. It can be argued what QE did for the U.S., and in my opinion it saved the U.S. from depression, but that can be debated on another thread.
Make take on fundamental news and data is that its importance will most likely depend on your trading style in terms of timeframe. Position traders should look more into the trends of monetary policy, GDP, inflation, employment; or in other words ask the question, “how has this data point been developing over the past few months, quarters, years?” This will help you determine the most likely direction over the long-term.
For short-term traders, direction is incredibly difficult to determine on the short-term, but what you can likely foresee is when volatility will spike and whether or not a momentum situation may develop. That’s how the news and events can be used. And when combined with technical analysis, you can determine which opportunities have good probabilities of success and good potential returns-on-risk.
Overall, almost everything can be an influence on currencies (e.g., financial, economic, geopolitical news) and so the driving focus shifts on almost a daily basis, which makes trading currencies the most difficult market to trade in my opinion (especially on the medium term swing basis)…but it’s also the best for an active trader in my opinion and it can be traded competently after some time developing your personal program and gaining experience. My two cents and I hope it helps 
France wants euro to be near 1.24 it will increase their wealth.