The Euro has gapped a little bit higher to kick off the trading session here on Monday as we continue to look to break out soon.
EURUSD
The Euro has gapped a little bit higher to kick off the trading session here on Monday to test the crucial 1.1850 region. In what I find interesting here is that although it does look like the Euro is trying to break out, it is not exactly having an easy go of it.
On the chart I had circled during the September interest rate decision coming out of the United States the idea that maybe Jerome Powell threw cold water on the US dollar falling apart. We are at that level again and when you trade markets a lot of times you need to have very specific events in the back of your mind in order to see if the market is truly changing.
Market Resistance and Key Levels
We are right there. We are in the same vicinity as you would expect to see either a big pushback or a massive breakout. So far it looks like the Euro is extraordinarily resilient, but I would also point out that it is overbought. With that being the case, I think you have to look at this as a market that is probably going to pull back a bit.
The question is can it hold 1.18? If it does not, then we are in for more chop. If we break to the upside and clear 1.19, then it opens up the next move which would be to the obvious 1.20 level.
All things being equal, this is a market that I think will continue to be noisy and it will be driven by the overall attitude of the US dollar in general. The US dollar has been beaten up by quite a few currencies, but really when you look at the US Dollar Index, we are basically at the bottom of the same range we have been in for a couple of years. We are on the precipice of threatening something bigger, but right now it still remains range bound, although that could be giving way. Pay attention to how this market closes at the end of the session.
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