- The Euro has gone back and forth during the course of the trading session here on Thursday as we are above the 1.16 level.
- But really at this point in time, you have to keep in mind that the market is likely to continue to be very choppy at this time of the year.
- We have issues with volume and volatility because of lack of participation, but we also have plenty of concerns out there as to where we go next.
The 1.16 level underneath is significant. As far as importance is concerned, it was previous resistance, was support, and now it looks like it is a bit of a magnet for price at this point.
Is Uptrend Still Intact?
It’ll be interesting to understand how we see this as a uptrend or if we are just pulling back into a fair value gap after a double top. If we break down below the 1.15 level, I think the bottom falls out in the euro as the European Central Bank is almost certainly at the very least going to sit still and the Federal Reserve may be a little bit more stubborn about cutting rates than people think or maybe hope.
That being said, it’ll be interesting to see how this plays out. We are definitely at a point of inflection, but we’re also in the month of August, which means there may be a serious lack of participants. And in this environment, I expect a lot of back and forth more than anything else.
I’d be a bit surprised to see the Euro break above the 1.18 level, but if it does, that’s obviously a strong sign. And then we will go looking at 1.20. Anything above there could kick off a multiyear situation of strength.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.