- The Euro has been very noisy on Friday, as we are trying to determine the risk appetite of traders.
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Volatile Range Trading Amid Fragile Risk Sentiment and Macro Uncertainty
The Euro has been very noisy during the trading session on Friday as we continue to see a lot of volatility between the 50-day EMA and the 200-day EMA indicators. With this being said, the market is likely to continue to see a lot of questions, and I think a lot of concerns about interest rates and where they are going. With that being said, I believe this is a market that remains very difficult to overcome and I also recognize that the markets will remain very choppy and volatile when it comes to the idea of whether or not we are going to actually be able to move forward.
The market participants right now of course are worried about the Middle East and all of the noise coming out of there because it has such a massive influence on the bond markets and whether or not yields rise or fall. With this, I suspect we have to be very cautious, we have to recognize that there are a lot of frayed nerves out there. And of course, we have to look at this as a market that is probably going to remain choppy and a bit confusing.
A Longer Term Trading Range
That being said, we have a longer-term trading range that is quite obvious to me. The 1.1850 level continues to be an area that I think is a major ceiling, and I think the 1.14 level underneath remains a major floor. With that being said, I do believe this is a market that will eventually try to figure out what to do next via the bond market or perhaps even what's going to happen as far as energy comes from the Middle East to the European Union.
With that being said, I recognize this is a market that will continue to see a lot of questions asked about whether or not risk appetite is picking up or if it is dropping. I do believe at this juncture we have a situation where people will be looking to try to go with more risk appetite, but you also need to keep in mind that there are so many different moving pieces at the moment that it is very difficult to get overly aggressive.
With this, I remain slightly positive, but I also recognize it would not take much to turn the market back around. Short term trading is probably going to remain the overall attitude in this market.
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