Euro Bounces to Check 50 Day EMA for Resistance

The Euro has been somewhat positive for the session on Tuesday as Russian troops have pulled back a bit from the Ukrainian border. That being said, it should be noted that it is only some of the troops, and therefore it is a fluid situation. This means that at any time, we could see a headline that turns things around rather quickly. The markets will continue to be on edge, and therefore you should keep your position somewhat small until the dust settles.

EUR/USD Video 16.02.22

The markets will remain vary cautious for the foreseeable future as we are not only paying close attention to the potential armed conflict, but the Federal Reserve as well. Because of this, we are likely to try and carve out a consolidation region more than anything else. The 50 day EMA so far is acting as dynamic resistance, but I don’t put too much faith in that indicator, all things being equal. If we do take off to the upside, it is possible that we go looking at the 1.15 level as a target.

To the downside, we are more likely than not to go looking for a move to the 1.12 area, but this would accompany a lot of ‘risk off trading’ in other markets as well. The USD continues to see rates spiking in its favor, but this in only part of the equation. With the de-escalation at the Ukrainian border, we may get a pop sooner at the moment, but whether or not it lasts is another question all together. Looking at the market, I suspect we are simply entering a wider range between 1.12 and 1.15 above.

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