- The Euro has been a little bit choppy during the Friday trading session, but quite frankly, I would not be surprised because while the Americans are at work, the reality is that most Americans are not at work.
- You have to keep in mind that about half of Europe is either closed for Boxing Day or some variation of that, and therefore, liquidity would be a major issue.
- All things being equal, this is a market that continues to see the 1.18 level as significant resistance that I think extends at least 50 pips, maybe 75.
Short-term pullbacks, I do think, are very likely, and signs of exhaustion I think, could lead traders into thinking that we are going to end up being some type of consolidation.
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All things being equal, this is a market that I think you can look at through the prism of trading back and forth between the 1.15 level and the 1.18 level with a little bit of padding on both sides.
The 200-day EMA currently sits at the 1.1475 level and is rising. I think that is something worth paying close attention to. With this, I think you have to understand that this is a marketplace that, given enough time, should have to make a bigger decision. This is something that I think traders will be watching closely over the next few weeks, although there are holiday sessions to cause a bit of malaise.
As things stand right now, we have the European Central Bank, which I think a lot of people believe is going to remain somewhat stagnant, and the Federal Reserve could be cutting later down the road, maybe a couple of months, and I think traders are trying to get in front of that. The reality, though, is that the interest rate differential will probably flatten out, and that could lead to very sideways action.
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