The Euro fell on Friday as interest rates in the United States continued to climb.
That being said, interest rates in Germany have climbed as well, but really at this point I think a lot of traders are starting to get very nervous about this situation in the Middle East where traders have to wait for the next headline to determine whether or not there is any progress being made in the idea of finding peace.
I don’t see a lot of progress and sooner or later you have to worry about inflation via energy. Europe is in a much more vulnerable position than the United States is due to self-imposed green regulations and a moratorium on drilling of a lot of its resources. So, with that being the case, a lack of natural gas and crude oil is a toxic situation for Europe.
Vulnerability and support levels
If we bounce from here, which happens to be the 200-day EMA, it offers a short-term opportunity for those who might be willing to fade the selling pressure, but quite frankly I would prefer to see a bounce and signs of exhaustion that I can start shorting again.
Top Regulated Brokers
I do believe that the EUR/USD pair is going to stay in the range it’s been in for some time and, for what it’s worth, the Euro is basically at the same price it was when it was introduced in 1990. In other words, with all the noise that we’ve had over the last couple of decades, it really hasn’t gone anywhere; it is worth the same as it was back then.
If we break down below the 200-day EMA we could go down to the 1.14 level, which I see as a massive support level, but I also recognize that the 1.15 level probably offers support as well. Rallies look suspicious to me at this point in time.
Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe to check out.