Euro Continues to Drift a Bit

The Euro has drifted a little bit lower during the trading session on Wednesday as we have the market waiting for the FOMC meeting. At this point time, the market is trying to figure out whether or not we are going to see a very hawkish Jerome Powell or not. At this point in time, it is very likely that he will be very hawkish, because quite frankly inflation is a political issue in the United States as well. Yes, I have been told that the Federal Reserve is independent, but the reality is much different as I am sure you have figured out by now.

EUR/USD Video 27.01.22

The 1.1225 level is an area that I will be paying close attention to, as it is significant support, and if we break down below there, I think it is very likely that we will see this market fall apart and go looking towards the 1.12 handle, and then possibly open up a move down to the 1.10 level underneath. All things been equal, this is a market that I think will continue to see a lot of choppy behavior, and therefore on any bounce I would more than likely be looking to short this market due to the fact that the US dollar is certainly being driven by interest rate expectations and of course if there is going to be a slowing of the global economy, the US dollar typically picks up quite a bit of momentum. Ultimately, this is a market that is choppy under the best circumstances, so it should not be a surprise at all that we are going to have a very volatile session number for the next day or so.

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