Euro Fails at Resistance for the Week

The Euro had an extraordinarily bullish previous week, but it looks now as if the CPI numbers have truly terrified traders into buying the US dollar. Furthermore, St. Louis Federal Reserve voting member James Bullard suggested that rate hikes are coming quicker than anticipated. Beyond that, the Federal Reserve is having an emergency meeting on Monday, so this does suggest that monetary policy is in fact going to be much tighter in America going forward, so this may put a little bit of a beating on the Euro as a result.

EUR/USD Video 14.02.22

That being said, it is hard to ignore the candlestick from the previous week, but you should also know that the area above the 1.15 level extends all the way to the 1.16 level as far as significant resistance is concerned, so I think we have the makings of a real mess here. Ultimately, I do think it is probably only a matter of time before we have to make some type of move, but I think we may see a lot of back and forth in the short term more than anything else, as the world tries to figure out whether or not the Federal Reserve can raise interest rates as many times as some people suggest they can.

With that being the case, it is more than obvious to me that we have a lot of work to do, and therefore I would not be too complacent with this market. With the type of volatility that we are seeing, you need to cut your position size down rather drastically as you can get hurt rather quickly if you are not careful.

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