EUR/USD
The Euro initially rallied during the trading session on Monday, but you can see that there are plenty of little areas above that could cause a bit of an issue with the 200-day EMA, offering a bit of a barrier right along with the 50-day EMA.
I do think the area right around the 1.16 level is resistance, and I think it does make a certain amount of sense that we could see a bit of trouble in this general vicinity. And in fact, we have already seen a bit of selling pressure in this area, and with that being an area that has been choppy in the past, one would think that there must be a lot of order flow in that region.
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Ultimately, if we could break above the 1.17 level, it could free the Euro to go looking to the 1.18 level, but the fact that, as people get excited about the potential of peace, the Euro rallies but cannot hang onto some of the gains, tells you that this is not going to be an explosive pair. I think we tested the fair value range, and it still looks very much like a situation where we are more likely than not going to see the US dollar still highly attractive to a lot of traders in various currencies.
Regional Energy Concerns and Central Bank Policy
Regional Energy Concerns and Central Bank PolicyThe Europeans are going to have issues with energy, yes, even if the Strait of Hormuz is open, there is a certain amount of delay in the supply chain, which could cause some problems for that continent. Furthermore, despite the fact that the ECB raised by 25 basis points last week, Europe still lags America, and ultimately, that will be what determines the direction of this pair.
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