- The Euro initially fell on Thursday but has turned around to show signs of life as the ECB meeting and the CPI numbers have come and gone.
- The ECB meeting was essentially what people expected, as the European Central Bank is going to hold rates, and will “watch the data.”
- Because of this, it essentially means that the Europeans don’t know what they are going to do, but we do have a lot of interest out there and assumption that the Federal Reserve is going to cut next Thursday.
- With this, there isn’t a lot of “unknown data” at the moment. But we will have to wait for my suspicion to tell me is the press conference after the FOMC Meeting.
Technical Analysis
The technical analysis for this market is rather flat at the moment, and as a result the market is essentially hanging out in the same 200 pip range that we had been in. The 1.16 level is an area of support, with the 50 Day EMA sitting just above it, and the 1.18 level above has significant resistance. As long as we are in this range, it suggests that the market doesn’t really have anywhere to be. It is worth noting that the 1.18 level has been very difficult, and at this point it doesn’t look like breaking above that level would be very easy. That being said, if we were to break above the 1.18 level, then it’s likely that the market would go looking to the 1.20 level.
To the downside, if we were to break down below the 1.16 level, then it’s likely that the Euro will drop toward the 1.14 level, which is an area that has already shown itself to be supported. Ultimately, I don’t know that we are looking to break down below the bottom of this market, but we don’t necessarily have the momentum to break to the upside either. I think we will stay in this range for a minute, perhaps waiting for the FOMC results next Thursday.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
