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MENAFN- Daily Forex)
The Euro has rallied during the trading session on Thursday as we are now testing the crucial 50 Day EMA. The 50-day EMA is a significant technical indicator that many traders closely monitor. Ultimately, this is a market that I think continues to see a lot of choppiness, but I believe that the Euro will continue to be rather weak from the longer-term standpoint.
Recent Consolidation
Recently trading in this market has been between the 1.05 level at the top and the 1.02 level at the bottom. At this point, we are getting fairly close to the top, and it's probably worth noting also that the 1.05 level has a lot of noise that extends all the way to the 1.06 level. Because of this, I think you've got a situation where a lot of traders are going to be struggling to break out above there, but if we did see the Euro break that level, then you have to have serious discussions as to whether or not the trend has changed.
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As things stand right now, I don't see the EUR/USD pair breaking above there, unless something drastically changes in the United States, because the European Union is starting to see signs of life in Germany and France, but they still have a long way to go as far as monetary policy is concerned. In fact, this is part of the problem with the European Union, you have countries like Spain which will be completely different than countries like Greece or Finland. I would not want the job of setting monetary policy in this scenario.
EURUSD Chart by TradingView
As things stand right now, I'm more than willing to start fading signs of exhaustion after short-term rallies, and I think ultimately this is a market that will continue to look for a long wick's to the upside to start shorting again. This is what I've been doing for a couple of months, and until something fundamentally changes, or we break above the 1.06 level, there's no reason to get long of the Euro.
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