Euro Gives Up Early Gains

The Euro initially tried to rally during the trading session on Wednesday but then got turned around to show signs of exhaustion again. Quite frankly, the Euro looks sick, and I do think that the US dollar is about to start strengthening again. The 50 day EMA is a technical indicator that a lot of people follow, but it should be noted that it is somewhat sideways at this point and therefore will not have as much efficacy as it normally would. Nonetheless, this is a market that after forming the double top of the 1.15 level more likely than not looks soft at best.

EUR/USD Video 17.02.22

Do not get me wrong, I do not necessarily think that it is going to be some type of meltdown, just that we continue to see this pair behave in a very choppy manner as we look to form some type of range again. The 1.15 level above is an obvious candidate for resistance, but support is going to either be near the 1.13 level, or the 1.12 level, depending on how bearish we do in fact get.

The Euro has a Central Bank behind it that is starting to recognize inflation but is light years away from doing anything. Furthermore, European Central Bank members continue to sound more dovish these days since the market try to price in two interest rate hikes. In other words, the ECB is very unlikely to tighten monetary policy anytime soon, and with all of the risks out there it does make a certain amount of sense that the US dollar is still favored.

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