Euro Goes Back and Forth

The Euro has gone back and forth during the course of the trading session on Friday as we continue to dance around the 50 day EMA. That being said, I do think that the market probably finds reasons sooner or later to make a move. Quite frankly, the interest rate differential should continue to favor the US dollar but if we get more of a “risk on” type of move that might help the Euro. The market is more likely than not going to be choppy, but that is nothing new for the Euro as it is typically a very range bound market.

EUR/USD Video 21.02.22

To the downside, the 1.13 level is going to be support, while the 1.15 level will be resistance. Once we break out of this range, I am more than willing to put some money to work but right now I think we are simply looking at back and forth and therefore you need to keep your position size small, in trade based upon short-term support and resistance on lower time frames. With this being the case, unless you are trading intraday, you probably do not have much use for this market right now. The market is more likely than not trying to build some type of consolidation range, which is the typical behavior of this pair.

One thing that I will use the currency pair for is to get a gauge on US dollar strength or weakness, and perhaps the ability to figure out what to do with other pairs such as the EUR/JPY, EUR/CHF, and many others. After all, you can use this is a relative strength indicator even if it is not something you wish to trade.

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