Euro Gives Up Early Gains on Monday

The Euro has initially tried to rally during the trading session on Monday but has turned around to show signs of weakness again. The 50 day EMA continues offer resistance, but quite frankly so does the 1.14 handle. When you look at the candlestick, you can see just how uninterested the market is in trying to hang on to gains. If we break down below the 1.13 level, we could see a bit of a move lower, perhaps reaching towards 1.12 handle after that.

EUR/USD Video 22.02.22

Keep in mind that the ECB is nowhere near tightening monetary policy while the Federal Reserve is certainly going to continue to be that way. Looking at this chart, we are essentially hanging about the previous cluster, and I think at this point in time we are probably going to see the market try to carve out some type of trading range. If I were to guess where that is right now, I would suspect that the 1.12 level would be the bottom, while the 1.15 level above would be the top. Having said that, the market does tend to be very choppy and therefore I would not look for huge moves, at least not anytime soon.

I think at this point in time you are stuck trading short-term charts, but that is typically the case with this pair. This is because the Euro tends to be very choppy, and therefore you cannot put too much into the idea of a trend trade anytime soon. Ultimately, I do favor fading rallies, just as we have seen during the trading session on Monday.

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