The Euro initially fell on Friday to test support, where yet again, we have seen some interest in owning the Euro near the 1.14 level.
EUR/USD
The EUR/USD initially fell on Friday but has turned around to show signs of life, as we had gotten pretty negative over the last several days. And of course, we were heading into a weekend that also featured a holiday on Friday in the United States, so it's not a huge surprise to see a little bit of a bounce right at an area that's been important for some time as support anyway.
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So, I think this sets up, all things being equal, a bit of a recovery in the beginning part of the week. As long as we don't get some type of major risk destruction, then I think risk appetite probably veers away from the US dollar, at least for the time being.
Technical Support and Key Resistance Levels
The 1.16 level is an area that I think you'll continue to see resistance at. It's basically the middle of the overall range that we had been in, but it also features the 200-day EMA. The 50-day EMA is trying to cross below there, but we are basically sideways at this point.
And I think with that being the case, you have to believe that this is a market that short-term buyers probably take the ball from here. But if we were to turn around and break down below the 1.14 level, it could open up a drop down to the 1.12 level.
Interest rates in both countries, or both economic zones, have dropped, and that makes things more or less a wash. And if that's the case, then we're just going to stay in the same range we've been in for the last year or so.
With the exception of a few sessions here and there, we find ourselves between the 1.14 level, where we had bounced from on Friday, and the 1.1850 level above, which has been a ceiling reliably many times in the past.
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