Euro Continues Same Consolidation

The Euro has rallied just a bit during the trading session on Wednesday to test the 50 day EMA. The 50 day EMA currently sits at the 1.1350 level, and as a result it is likely that we could continue to see noise because quite a bit of choppy behavior. Ultimately, the market is trying to figure out whether or not it wants to bounce and attack that double top above, but right now it does not seem willing to build up the momentum. To the downside, we have the 1.1290 level supporting the market, and if that level gets broken through, it is very likely that we would see a “flush lower.”

EUR/USD Video 24.02.22

On that breakdown, the Euro would more than likely fall towards the 1.12 level, an area that has already proven itself to be important. The question is not so much as to whether or not that can happen, because quite frankly we had been in a downtrend previously, but whether or not we have the momentum to break above the double top above at the 1.15 handle? Because of this, the market will more than likely need some type of event to make that kick off.

When you look at the interest rate differential between the two central banks, it favors the United States quite drastically, but traders are still trying to figure out whether or not the situation in Europe will calm down, mainly looking towards the Ukraine. If we do get good news there, might be enough to send this market a little higher for a while, but then we will start to focus on the slowing growth again.

For a look at all of today’s economic events, check out our economic calendar.