The Euro rallied a bit during the early part of the trading session on Tuesday but has seen a little bit of pushback as the market continues to focus on a lot of headline risk coming out of the Middle East.
Keep in mind that the situation in the Middle East has a lot of people worried about energy inflation and that in and of itself could cause a bit of a problem for many countries, not the least of which would be Germany, which is a major driver of where the Euro's going to go.
After all, the German industrial base is a major driver of European strength.
And if we continue to have issues, that will continue to plague the Euro. Furthermore, we continue to see economic numbers in the United States come out hotter than anticipated and that has a major influence on US dollar strength, at least in the short term.
Ultimately, I think this is a market that is doing everything it can to try to determine whether or not we will stay in the same range that we have been in for the better part of the year.
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Long-Term Range and Core Levels
Overall, the 1.14 level continues to be a massive support level for the EUR/USD pair, while the 1.1850 level above continues to be a massive resistance level.
We are closer to the bottom, so some value hunting may occur here, and I think that's what we've seen over the last couple of days.
However, most things favor the US dollar right now, not the least of which would be the uncertainty out there. So, I do think that rolling over makes sense, but if we could break above the 200-day EMA, that could change the overall attitude.
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