- The euro remains slightly positive against the US dollar but faces resistance near the 50-day EMA ahead of major central bank events.
- Key levels include 1.17 and 1.1550, with potential volatility expected throughout the week.
The euro has shown itself to be slightly positive during the trading session on Tuesday against the US dollar, but we are looking at the 50-day EMA offering a bit of resistance. I think this is a scenario that could remain somewhat choppy and noisy as we get the FOMC meeting and press conference on Wednesday, and then the European Central Bank interest rate decision and press conference on Thursday.
There Should be Noisy Moves
In other words, expect a lot of noise, confusion, and choppiness. At the end of the day, we’ll have to see what actually happens, with Friday likely being the first non-volatile day from a central bank announcement perspective. Ultimately, I do think we have a situation where there is still a significant amount of resistance above, especially near the 1.17 level.
The 1.17 level has been important previously, and it is backed up by the 1.18 level. Anything above there then gets very interesting and becomes quite pro-euro. But right now, it’s worth noting that we are just hanging around in this consolidation area. We have seen the U.S. dollar do nothing but strengthen for the most part against the euro after the FOMC announcement.
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If we break down below the 1.1550 level, that could send the U.S. dollar flying down to the 1.14 level, where the 200-day EMA currently resides. That could end up being a significant floor because anything below there would pretty much fire off every signal that we are now in a massive downtrend. At that point, I think you would see the U.S. dollar really pick up strength against multiple currencies, not just the euro.
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