Euro Forming Possible Double Top

The Euro has fallen a bit during the trading session on Tuesday to test the 1.14 level in early New York trading. This does signify that we may be looking at a potential double top, so that is something to pay close attention to. If we break down from here it is likely that the 50 day exponential moving average will be tested, and then perhaps a move down to the 1.13 level. That being said, we have crucial inflation numbers coming out of the United States on Thursday, so you need to keep that in mind. The inflationary expectations coming out of America seems to be the biggest driver of everything going forward, and if it does in fact end up being a very hot number, we could see the Euro fall as a result.

EUR/USD Video 09.02.22

To the upside, if we can break above the 1.15 level that would obviously be a very strong showing by the Euro, but you should also keep in mind that the area of resistance extends all the way to the 1.16 level and of course we have the 200 day EMA right in the middle of all of this. In other words, a break to the upside is probably going to be very choppy to say the least, so keep that in the back of your mind. In other words, the path of least resistance is still to the downside, even if we have quite a bit of noise out there that could slap this market around. Keep that in the back of your head and keep your trading position size reasonable in this type of environment.

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