- The EUR/USD has done almost nothing over the last week, and that will probably continue to be the case going forward.
- After all, we are stuck between Christmas and New Year’s Day, and most large traders are worried about more important things than the market.
- However, it is in these environments we can see some of the most erratic and biggest moves.
- This is where retail traders have a little bit of an advantage because you are not trying to get in and out with huge positions.
However, I would point out that the 1.06 level has been important multiple times in the past, so it’s not you surprised to see a little bit of market memory in this area. With that being the case, I anticipate that we will more likely than not see a situation where the market must work away a lot of the noise, and then eventually make a bigger move. I think we are probably going to see the 200-Day EMA underneath offer a significant amount of support, but that is all the way down at the 1.04 area. If we were to break down below there, then it would be a significant turnaround that we could see the Euro drop all the way down to the 1.02 level.
Market Seems to be Killing Time
On the other hand, if we turn around and take out the highest that we made recently, that could open the Euro to go looking to the 1.08 level. The 1.08 level offers the gateway to 1.10 level, an area that of course would attract a lot of psychological attention if nothing else. At this point, the markets are going to be paying attention to central bank talk, as the Federal Reserve has recently reiterated its desire to stay tight for longer.
The European Central Bank is still pretending that it is going to be extraordinarily hawkish, but they also have the problem of a recession at the same time. It’ll be interesting to see how that plays out, but my anticipation is that the Europeans will blank before the Americans do. At this point, the market looks as if it’s just killing time between now and the jobs report that we get at the beginning of January as it will be the first data that the market will absorb of consequences going forward.
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