- During the trading session on Thursday, we have seen the euro rallied pretty significantly against the Swiss franc, only to fail completely and roll over.
- By doing so, this shows just how confused the market is at the moment, and one signal that perhaps it should be avoided at all costs.
- After all, the EUR/CHF pair is one that is a great gauge for how European traders feel about the overall risk appetite of the markets.
- The market being as confused as it is right now means that you need to seriously question whether or not you should be involved in any market, due to the fact that the risk appetite signals are all over the place.
While this does sound dire, the reality is sometimes you just don’t want to be involved. This will be especially true as we continue to see a lot of noise about tariffs, and perhaps the fact that they may or may not be a part of the reality. After all, with Trump going back and forth and what he wants to do, traders are too caught up in the drama to understand what to do. Remember, most trading is done via computer, and it reads a tweet or a comment or something like that and makes a decision. Machines are not set up to deal with the nuance of language, and this is what you end up with. Because of this, I think you need to be cautious at best and also recognize that this is a market that has no real directionality, and we are basically in the middle of the overall range.
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At this point in time, the 0.9250 level underneath is a major support level, while the 0.95 level above is a massive resistance. Because of this, think you got a situation where traders will be looking at this as “fair value, and therefore until we get some type of clarity, I suspect that we will hang around this area. Because of this, I think it’s a fairly neutral market, but if we were to break down below the 0.93 level, then I’ll be looking at the 0.9250 level is an area that I might be willing to buy the dip.
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