Euro Bounces Back Into the 50 Day EMA

The Euro has initially fallen during the trading session on Tuesday, only to turn around and bounce again. The 50 day EMA comes into the picture and causes a bit of a headache for buyers. This is the same general vicinity that we have seen a lot of noise in over the last several sessions, so it certainly looks as if we probably have some issues just above. Ultimately, I think the US Dollar will continue to outperform the Euro as we continue to see a global economic slowdown. As long that is going to be the case, then it is likely that we go looking towards the lower end of the overall consolidation.

EUR/USD Video 23.02.22

The interest rate expectations for the US dollar are still higher, while the European Central Bank is just now starting to pay attention to inflation. Because of this, traders had started to price in rate hikes, but they have turned around and price those out almost immediately. Because of this, I think we continue to see a lot of noisy behavior, but we will continue to be more range bound than anything else, which is quite typical for the Euro under most conditions. The fact that the 50 day EMA sits just above also suggests that we are simply going sideways more than anything else.

I do not like the idea of buying this market anytime soon, as there is a double top above that is like a massive brick wall, and of course we continue to see all rallies seem to be sold into. A breakdown below the 1.1290 level could open up the possibility of the 1.12 handle given enough time.

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