The euro did try to rally a little bit during the early hours here on Monday but simply cannot hang onto gains at the moment as the Federal Reserve Chairman nominee has the markets rethinking things.
EUR/USD
The euro did try to rally a little bit during the early hours here on Monday but then turned around to show signs of weakness as we are testing the 1.18 level, an area that is going to be important for our next move.
The 1.18 level is an area that I think a lot of people will be watching and with that being said I think this is a market that is going to continue to play based on the central banks around the world specifically the European Central Bank which is doing nothing and then the Federal Reserve which of course has just got itself back into the headlines due to Kevin Warsh being nominated.
Central Bank Impact and Technical Levels
That's a little bit more conservative than I think people thought was going to be the case. With that there is some doubt as to how many Federal Reserve rate cuts there are going to be and with that I think we have to look at this as a market so that if it breaks down below the 1.18 level we could be re-entering consolidation. This would be typical euro/dollar behavior to be honest.
If we turn around and take out the 1.1875 level above, then I think you have a real shot at this market rallying perhaps to the 1.20 level followed by the 1.23 level which is what the implied move from the consolidation range suggests.
Lots of things are going on and then on top of that we have the employment figures later this week.
Ready to trade our EUR/USD analysis and predictions? Here are the best European brokers to choose from.