- You can see that the Euro has stabilized a bit during the trading session on Friday as we continue to pay close attention to the 1.04 level.
- Donald Trump’s announcement of tariffs on the European Union has had a greater impact on traders than I initially expected.
- Given that he had previously mentioned the possibility of such tariffs, I’m somewhat surprised by the market’s reaction.
Nonetheless, the market is now below the 50-day EMA, and that will attract a certain amount of attention in and of itself, and I think really what matters here is that we now find ourselves somewhat affirming the previous consolidation area, at least in theory we are of 1.05 above being a major barrier and 1.02 underneath being a major floor. As long as we stay in this area, I think we will continue to see a lot of noisy and erratic trading. That's typical for the Euro. All one has to do is zoom out, look at the chart, and you can see a lot of it's just chopping back and forth.
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Rangebound Still
This range that we find ourselves in now is just below the one before it. And that is common for the euro as well. It finds a range, it stays there for a certain amount of time, and then it moves to the next block. With that being the case, I think you have to assume that there is still a lot of selling pressure above the 1.05 level. Just as there's a lot of support at the 1.02 level, a lot of pundits had the euro go into parity before it's all said and done. It wouldn't really surprise me if that happened.
As far as getting bullish, I would need to see this market actually break above the 1.06 level because it would take out a cluster from December that could cause a bit of headaches for buyers. And of course, take out the crucial 200 day EMA. Ultimately though, I think we've got a lot more sideways action in front of us than anything else.
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