- The Euro initially tried to rally during the session on Thursday but has given back the gains at least a bit.
- Ultimately this is not a big deal because this is just a repetition of what we have seen recently.
- Quite frankly, it’s like the movie Groundhog Day, each day is the same.
All things being equal, I think we have a scenario where the market is going to continue to hover around the 50 day exponential moving average and right now, it looks as if the 1.08 level underneath is going to be somewhat significant support. After all, we not only have bounced from there a couple of days in a row, but we have also seen the 200 day EMA creep into that region. On the upside, the 1.0920 level seems to be resistant and although the euro has given up gains early in the day, I think this just remains more of the same. After all, the EUR/USD market doesn't really have any real reason to get moving one way or the other, as central banks are clear as mud, as it were. The Federal Reserve is expected to cut rates sometime during 2024, but at the same time, we have to start asking questions about the ECB and whether or not they will have to.
Germany and its issues
After all, Germany has gone into a recession and Germany is essentially most of the European Union from an economic standpoint. The market looks as if it is in a larger consolidation zone between the 1.10 level above and the 1.0750 level below. We are currently right around the middle of that which can be thought of as potential fair value. If that's going to be the case, then it's not a surprise that we're just hanging around.
I don't like the idea of getting too big right now, but if you were a short-term trader, this might be the market for you as you try to pick up 15 to 20 pips at a time. Be cautious though. Eventually, we will break and when we do, it will probably be rather hard. Pay close attention to statements coming out of members of both the Federal Reserve and the ECB because I suspect more than anything else, it'll be some errant comment that gets the market moving.
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