Euro Continues to Bounce Around

The Euro has gone back and forth during the trading session on Thursday as we continue to wrestle with the idea of interest rate differential. At this point, traders are starting to price in the idea of a 75 basis points rate hike over the next year or so with the ECB suddenly, but that still lacks the firepower that the Federal Reserve is being priced into doing. Either way, this is a market that I think needs to be paid close attention to because it will give you an idea as to what is going to happen with the US dollar in general.

EUR/USD Video 11.03.22

The market looks as if the 1.11 level has offered a little bit of a barrier, and if we break back down below the 1.10 level, then we will more likely than not go down towards the lows again, which is very possible considering all of the external factors on the currency right now, not the least of which will be inflation, a slowing growth pattern out of certain economy such as Germany, and then, of course, the war in Ukraine.

All things being equal, this is a market that I think will continue to be more of a “sell on the rallies” situation. I especially would be interested in shorting near the 1.12 level if I get the opportunity. The 50 Day EMA is starting to race towards the 1.12 level, which would make it even more resistive based upon basic technical analysis. I am simply waiting for signs of exhaustion to jump on again.

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