- The Euro has done very little during the trading session to change its overall attitude, we've gone back and forth, we've even tried to break above the 50-day EMA but gave back those gains.
- This is a market that I believe is still very much looking for some type of potential range for the year and as things stand right now, it's just a lot of confusion.
- A lot of this is going to come down to the idea of interest rates and what they are doing so, you will have to be very cognizant of that as well: the Federal Reserve is expected to cut rates multiple times in 2024.
Are Traders Shifting Focus?
And now I think traders are starting to come to the realization that perhaps the European Central Bank will have to do the same. That might be part of what's going on with the euro/dollar pair right now. Ultimately, I believe that both of these central banks are probably going to have to get loose. So that's why I think this year will probably be more range bound than anything else. Nonetheless, we have to pay attention to a couple of levels, not the least of which will be the 200 day exponential moving average sitting just below. The 200 day EMA of course is an indicator that longer term traders like. And then of course after that we have the 1.0750 level. Above we have the 1.10 level, but we'll have to wait to see whether or not we can pick up the strength to even get there.
That to me is a major ceiling in the market and piercing the 1.10 level would be a huge victory by the bulls. Ultimately, I think you're looking at range-bound choppy behavior and that's probably how you have to look at this market in general. I would not get overly aggressive with my position sizing, because this is more or less going to be a short-term range bound type of market that a lot of people pay close attention to on short-term charts, but longer-term charts are a little misleading at the moment as we are just probing and searching for some type of clarity. I do not think we will get it anytime soon.
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