During the beginning of the trading session on Wednesday, we have seen a lot of Euro strength but have since rolled over to show signs of hesitation.
We are sitting just above the 200-day EMA, and the 200-day EMA will continue to be very important. If we break down below there, then we could go challenging the 1.16 level.
To the upside, the 1.17 level is an area that I think we might try to get to if we get a little bit more bullish or risk appetite behavior jumping into the market. Keep in mind that interest rates in America are still pretty high and that does help the dollar, but at the same time, most of what we're seeing here is a question as to whether or not things can get sorted out in the Middle East. If they can, that at least in theory should be good for the Euro because it might relieve some of the energy concerns in certain parts of it, like the industrial sector in Germany.
Consolidation and Market Noise
Ultimately, this is a market that I think continues to be very noisy, I think it continues to be very choppy, and I think it also continues to see a lot of questions as of where to go next.
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The EUR/USD pair is basically in the middle of a larger consolidation area between the 1.14 level and the 1.1850 level, but the price action on Wednesday tells me that the market still favors the dollar in general. I'm not looking for massive moves, but I think short term rallies probably offer selling opportunities for short term moves. Nothing major here, not longer term, just the way the market has been behaving.
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