- The Euro has initially tried to rally during the trading session on Thursday, but gave back some of the gains as you can see.
- And it looks to me like a market that is probably trying to sort itself out as to whether or not we can continue to go higher.
- I think more likely than not, what we are going to see is a situation where traders look to establish some type of range.
I do think that the range could be between 1.12 and 1.15, but that of course remains to be seen. We’ll just have to wait to see how that plays out. I certainly think that it’s hard to short this pair, although the US dollar is most certainly oversold. This is true not only here, but many other currency pairs as well.
Noise Would be Expected Here
The reality is this is a market that will continue to be very noisy and front and center in the sense that the trade talks between the United States and Europe haven’t progressed yet. If and when they do, it’ll be interesting to see how that plays out here, mainly due to the fact that Germany is pulling out of a recession and there is talk at least of the United States heading into one. So interesting days we live in right now.
I think ultimately you have a situation where traders will look at this through the prism of perhaps trying to take advantage of a range in the short term. But if we were to break down below the 1.12 level, that could change a lot of things for a lot of people. We’ll just have to wait and see. I’m pretty neutral at the moment. I do think that we’ve got some work to do. If nothing else, we’ve got to work off some of this excess fraud.
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