The euro has fallen a bit in the early hours of Thursday, as we are testing the support area below.
The euro has broken down quite a bit during the trading session here on Thursday piercing the 200-day EMA, but we are trying to hang on here. I do think that there is a significant amount of support between the 1.15 level and the 1.16 level and we are at the top of that squishy support region.
I do not necessarily think that any bounce here is going to be a major buying opportunity, but short-term traders may disagree and might be successful. If we do rally with any type of significance, I would be looking at the 1.1750 level as the beginning of serious trouble.
Geopolitical Risks and Market Sentiment
The market right now is trying to deal with a lot of geopolitical risk, obviously the war, the lack of natural gas in the European Union due to Qatari supply being cut off and of course the random headlines that will just come out from time to time.
With that being the case, it is very important to understand that although we had been in an uptrend previously, we just do not have any reason to get momentum to the upside. If we were to break down below the 1.15 level, I think the euro really starts to fall apart at that point, perhaps down to 1.11 before it is all said and done.
Top Regulated Brokers
That being said, I think more likely than not we are going to see choppy sideways action. That is essentially what the markets are doing in most places because they just do not know how to take the situation we are in now globally and make any sense of it. Why risk a bunch of money? So if you are a short-term range-bound trader, the euro is probably your place. Quite frankly, it typically is. This is just more of that same behavior just waiting to happen from what I can see.
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