EUR/USD
The Euro continued to grind sideways during the month of January, giving it absolutely no reason to think that the market is going to go anywhere in a substantial way anytime soon. The 1.15 level above continues offer massive resistance, and the 1.13 level has offered itself as significant support, perhaps extending down to the 1.12 level as it is the 61.8% Fibonacci retracement level from the break out months ago.
The only thing that’s going to send this market higher, and it does seem to be looking as if it is “leaning higher”, is a failure of the US dollar. Perhaps the Federal Reserve will continue to soften its tone, and that could be reason enough for the Euro to gain but it won’t have anything to do with the European Union itself. Out of the major economies, the European Union is set to be the slowest growing of the bunch, and there are signs that even that is somewhat of an optimistic view of things. The 1.15 level has proven itself to be rather formidable, so we can get a weekly candle closing above that level, that would be a good sign.
For the month of February, it’s very likely that we continue to grind further, perhaps with that slight tilt to the upside but I still look at this is a market that is going nowhere anytime soon. It is only if the Federal Reserve explicitly says that they are done raising rates that this pair will be able to break out in continue to go much higher. I do think that it goes higher over the course of the year but I would not be surprised at all if we didn’t see 1.18 until the fall at this rate.
