The euro fell during the trading session on Monday to kick off the week, reaching down towards the 1.2150 level. We could get a bit more downward pressure, perhaps reaching down towards the 50-day EMA, perhaps even down to the 1.20 level which I think even extends down to the 1.19 handle. The euro broke out from that level, showing a bit of a breakout in going higher to reach towards 1.23 handle. That is an area that has been previous resistance as well as support. The fact that we have pulled back from there does not surprise me at all, and I believe that we will have to back up in order to break above that level with any type of sustainability.
This market will build up enough momentum to break out, especially as massive amounts of stimulus come out the United States. It does not mean that it will be easy, and it does not mean that we will necessarily get straight there. The market is likely to continue to hear a lot of noise in this general vicinity, so I think that the market participants will continue to look at this as a potential buying opportunity given enough time. However, the euro tends to be very choppy and slow-moving to begin with, so my suspicion is that if we have more of the US dollar selling off in general, although this pair will go higher, it is likely that we will see other currencies out there moving much quicker.
This is a market that has been bullish, yet it is also one that has to deal with the European Union locking down various parts of the economy at times, and there is a lot of concern about whether or not we can get back to work the way we were before. I suspect that is not going to be the case, so this market will continue to see volatility, but we are most certainly in an uptrend. So, if you are patient enough, you should be able to pick up a bit of value, which I think a lot of traders are waiting to do.
