The Euro has tried to rally on Wednesday, but continues to see overhead resistance, as we are looking at a market that has no real clarity.
EUR/USD
The Euro has run to the upside initially during the trading session on Wednesday, only to turn around and show signs of weakness.
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That being said, the EUR/USD market is likely to continue to be very noisy. I think ultimately, we have to ask some questions of the 200-day EMA, which is where we stalled, and then I think you have to ask questions about the interest rate markets and really what is going on there.
Macroeconomic Factors and Technical Ranges
Because, quite frankly, the interest rate markets, specifically the 10-year yield in the United States, have been drifting a little bit during the trading session on Wednesday, yet again, as traders are trying to price in the idea of free travel through the Strait of Hormuz in the Middle East. After all, a lot of what had been priced in was energy inflation.
That being said, during the interest rate decision and following press conference, the Europeans this week did suggest something along the lines of a downturn in the economy, and I think ultimately you have a scenario where the US Dollar will strengthen eventually.
We are close to the middle of the overall consolidation range, with the 1.14 level underneath being a major floor and the 1.1850 level being a major ceiling. As we are right in the middle, I think you would see a reaction.
Keep in mind Friday is Juneteenth in the United States, so liquidity will all but disappear pretty quickly once we get through the Asian session and the Europeans on Friday. We will just drift into the weekend. I just don't think there's any real understanding of what's going on in the Middle East for people to put big bets on right now.
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