The Euro has risen a bit during the session on Thursday, as the markets are trying to sort out whether or not the Fed will have to cut rapidly, or if the data is stronger than that at the moment.
The Euro has been slightly positive during the trading session on Thursday as we are sitting around trying to figure out what the Federal Reserve is going to do next. After all, the jobs number on Wednesday was hotter than anticipated, so that some traders worried about whether or not the Federal Reserve is going to be able to cut the way people had expected.
On the other hand, we also have the CPI numbers coming out on Friday, which could give us a peek into inflation and if it's hotter than the 0.3% expected month-over-month, that could be yet another reason to wonder whether or not the Fed will be cut anytime soon.
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US Economic Strength and Technical Levels
Ultimately, this is a situation where the US is performing better than anticipated in general, and that has thrown a bit of a monkey wrench into the idea of a major breakout. The 1.18 level is worth watching, as long as we can stay above there and by extension the 50-day EMA, which sits just below, I think you have a real shot at this market perhaps going higher.
That being said, I do think that the upside is somewhat limited here longer-term; I'm thinking maybe 1.23 based on the consolidation. So, while there might be a move forthcoming, I don't think it's going to be violent to the upside; I think it's going to be more of a grind. If we break down below the 50-day EMA, that could be a very negative turn of events, perhaps sending the Euro down to the 1.16 level.
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