However, ECB President Draghi will be speaking this afternoon and impact the Euro too.
Merkel Provides Short Term Bounce
The Euro gained slightly against the U.S Dollar when trading opened this morning but remains within the lower depths of its mid-term range. The Euro is near 1.2330 and has a busy two days ahead as ECB President Draghi speaks today, and U.S Fed Chairman Powell speaks tomorrow.
The Euro may have gotten a bounce higher on the news German Chancellor Merkel has officially formed her coalition government. However, this may prove to be a short-term reaction.
Reversal Higher Not an Automatic Assumption
The Euro has produced a wide range the past month, but it does appear to have support near 1.22, while resistance is about 1.25. However, the fact the Euro remains near critical support should not cause traders to automatically think it will reverse higher near term.
Traders should note the Italian Parliamentary Election will be on Sunday. And if European Central Bank President Draghi sounds a cautious tone today in Brussels, the Euro may find itself confronting headwinds.
In the short term, we believe the Euro may be negative. The mid-term and Long term we are unbiased.
Yaron Mazor is a senior analyst at SuperTraderTV.
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