The euro rallied during the early part of the Wednesday trading session, as we continue to see a lot of noise around the war.
EUR/USD
The euro rallied during the early part of the Wednesday session and as we have broken back above the 1.16 level, but I don't know how long this will continue. Quite frankly we are approaching a significant resistance barrier in the form of the 1.1650 level and of course the 50-day EMA
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The US dollar has been bid quite strongly over the last several weeks with the war going on in Iran and of course rates spiking due to fears of some type of financial struggle due to energy input costs going higher. With that being said and of course the safety bid towards the US dollar, it does make a certain amount of sense that the euro has been struggling.
Geopolitical Rattling and Technical Levels
If we can break above the 50-day EMA then I think we have a shot at this market going to the 1.18 level but that takes an Herculean effort from what I can see as the market has been so rattled by the latest headline and the latest tweet that continues to be a major driver of where we go.
Ultimately, I think you have to look at this as a market that is going to remain very noisy and I think we're still for the most part in some type of consolidation range. We are hanging around the 200-day EMA so that's something worth watching as well.
But overall, I think until something changes in the Middle East it's difficult for the euro to gain significantly against the US dollar as it is so positive at the moment. I think we're reaching the top of the range; we'll have to see whether or not we can break out.