The Euro continues to see a lot of overhead pressures, as rates in the United States continue to rise. At this point, the market continues to watch the war for headlines as well.
EUR/USD
The Euro has fallen a touch during the early hours on Tuesday as the 1.16 level continues to be very important as resistance, but we also have the 200-day EMA in the same neighborhood.
I think this is a pair that is going to see a little bit of a relief rally over the last couple of days due to the idea that the conflict in the Middle East may slow down a bit. But that being said, interest rates in America continue to climb and that has put pressure on the Euro as it's more profitable to own the US Dollar as the interest rate differential definitely pays you to hold the Dollar.
Furthermore, there are pushbacks from the Iranians that perhaps the peace talks aren't going very far or maybe not existing at all.
TARGETING KEY TECHNICAL LEVELS
So, when I look at this and the fact that the Federal Reserve probably has to stay on hold over time, it probably means that if we break down below here the 1.14 level could be targeted. If we can break above the 50-day EMA, then the 1.18 level could be targeted, but I don't know if that is going to be easily achieved.
Now, if the war in the Middle East suddenly ends, we could see a jump like that, but then we'll start to focus on the longer-term outlook, and I think at that point it becomes a nice selling opportunity. I'm not saying you can't do a smash and grab run for a day or two, but I think ultimately there's more downward pressure on the Euro than up.