- The euro traded erratically following central bank events and softer U.S. CPI but failed to rally meaningfully.
- Persistent dollar resilience suggests the pair remains confined to a well-defined range, with fading extremes still favored.
The Euro has been all over the place during the trading session here on Thursday, which makes sense. We had the European Central Bank decision, which really wasn't a decision. And then we had the CPI numbers year over year in the United States, anticipated to be 3.1%, but came out at 2.7%.
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So, here's the thing. The euro is not rallying based on that. It is very stable. One would think that the US dollar would get pummeled, yet here we are. This tells me that the market is likely to hold this range that we have been in with the 1.18 level being significant resistance, extending up to about 1.1850.
Range Structure and Dollar Bias
As I watch the market right now, it looks like we're trying to turn a little bit negative. I remain bearish of the Euro, or maybe I should say bullish on the dollar, because that CPI number is still hotter than the Federal Reserve wants. Yeah, okay, fine. It wasn't as bad as it could have been, but it still gives them reason to think about cutting rates before actually doing it. Ultimately, I think this is a scenario where we stay in this range.
With the 1.15 level offering support and then again at the 1.14 level. I will be looking for signs of exhaustion to start fading or perhaps downward momentum. Obviously, if we break above the 1.1850 level, then I have to reassess things, but right now this looks like a market that just doesn't have anywhere to be other than this 300 or maybe on the extremes 400 pip range that we have been in since June.
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