- The Euro has been all over the place during trading on Monday as we continue to see a lot of noise in financial markets.
- That being said, it’s probably worth noting that we have given back quite a bit of the initial gains and as a result, it makes sense that the 1.09 level is an area that a lot of people have to pay close attention to.
- The 1.09 level is a large round psychologically significant figure and an area where we’ve seen a lot of action previously.
If we were to break down from here, then the 1.08 level should end up being a major support level. Anything below there, then really breaks this thing down. All things being equal, this is a market that I think you have to be very risk averse, mainly due to the fact that we have seen so much in the way of volatility due to the random headline out there that you have to expect there will be a lot of trouble just waiting to get involved in this market.
On a Rally…
If we were to rally from here, then the market could go back toward the 1.11 level. But I also recognize that we have a situation where a lot of the concerns will be whether or not tariffs continue. Right now, it looks like they’re going to, although the Europeans have announced that they are willing to go to a zero tariff situation.
But having said that, it’s not good enough for Trump because he also wants things like currency manipulation, dumping, other non-tariff barriers removed. So, the Europeans probably have some work to do before this really gets out of their face. But we have seen the U S dollar pick up strength against multiple currencies in the back half of the Monday session. I’ll be watching this 1.08 level because I think if we break down below there, the euro might be done rallying for a while. Any rally at this point in time probably just goes back up around the 1.10 level looking for some sense of stability.
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