- Early on Friday morning, the euro was erratic, as we continue to witness a lot of erratic and noisy behavior worldwide.
- If that's the case, I believe that between now and the end of the year, this pair will be trained to identify a range that we will be confined to.
Early Trading Was Positive
The early hours of Friday saw a small rally on the Euro but bear in mind that Thursday had also seen similar movement and had even been more bullishly pressured before giving up. It appears that there are currently significant headwinds, particularly in the area of the 1.09 level. Thus, I do not believe that the Euro is going to take off. However, this ignores the potential for some kind of surprise headline going forward.
I believe that this is just an extension of the currency pair's general grinding dynamics and the soft side involvement of both central banks. Therefore, given all else is equal, there really isn't a reason to jump to one currency over the other if they both start cutting rates or if they at least decide to be dovish this year. Remember that the US dollar is regarded as a safety currency, so if there is a significant shift in sentiment away from risk, that might affect things.
However, as things stand right now, this market is only circling about in an attempt to figure out where it's going. And regrettably, I believe that may be the story for most of the year. Honestly, there's no reason why one should do better than the other. People are predicting that the Fed will make cuts, and the Fed has even declared as much. However, Germany is experiencing a recession, so the ECB will eventually need to take that into consideration.
Having said that, I believe that for the foreseeable future, you might be looking at a range around 1.10 to 1.07 or so. Of course, with so many other geopolitical events taking place globally, that could alter. Unfortunately, it appears that we have nowhere to be right now. This definitely works for you if you're a short-term trader, but you're attempting to gain 20 or 30 pip gains at a time. Here, major maneuvers are not being discussed.
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