Euro Continues to Levitate

The Euro has fallen just a bit during the course of the trading session on Monday but remains somewhat elevated as the 1.15 level above seems to be a bit of a barrier. Perhaps it is also due to the fact that we got to this high level so quickly, but either way it looks as if the Euro is starting to run out of a bit of momentum. Because of this, it would not be overly surprising to see a little bit of a pullback, but if we do not get that, it would obviously be a very strong sign.

EUR/USD Video 08.02.22

To the downside, if we do break down below the lows of the last couple of days, we could see the Euro going to the 50 day EMA rather easily. On the other hand, if we break out to the upside and clear the 1.15 hurdle, be aware the fact that there is some previous noise between the 1.15 handle and the 1.16 handle, meaning that it will probably be very choppy indeed. At this point, I would more likely than not that I will use the EUR/USD chart as an indicator on other pairs involving the Euro that I can trade. In other words, I might look to buy the Euro against the Japanese yen or maybe the British pound, etc.

All things been equal, I believe that you are looking at a very choppy market, but you should keep in mind that this is a market that has already priced in two rate hikes coming out of the European Central Bank, which is that inflation is already getting close to peaking.

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