The Euro initially rallied during the trading session on Thursday but gave back the gains to stay within the consolidation area. By doing so, the market looks as if it has nowhere to be, as we are simply killing time between now and the end of the year in a relatively well defined range. Ultimately, I think this market probably has to deal with chop more than anything else, but that is the way this currency pair typically trades anyway.
EUR/USD Video 24.12.21
The 1.1375 level is significant resistance, while the 1.1225 level is significant support. I think we stay in this range between now and New Year’s Day, as we are trying to figure out what to do longer term. As time goes on, there will be less people are trading this market, meaning that it probably will not do much. The 1.13 level seems to be a bit of a magnet for price, so I essentially think of that as “fair value”, which is basically where we are at as I record this.
The 50 day EMA is just below the 1.14 handle and reaching towards the resistance barrier, so I think that will make it even more difficult to overcome. The market had sold off quite drastically a few weeks back, and now I think will try to figure out whether or not the concerns in Europe dictate even lower pricing for the Euro. That is something that we will certainly take up in the beginning of January, as a move below the 1.12 level could open up the 1.10 level underneath, and possibly even lower than that.
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This article was originally posted on FX Empire
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