The Euro has been a bit positive in the early part of Thursday, but it still faces serious headwinds.
EUR/USD
The Euro has shown itself to be somewhat positive during the early part of the trading session on Thursday here, but we have given back gains to show a little bit of hesitation to get above that crucial 1.1450 level. The 1.1450 level is an area that extends up to the 1.15 level, and until we get above that level, I think we look at this with a little bit of suspicion.
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I suspect that the interest rates in the United States climbing like they have will continue to put a bit of trouble into this market. We are forming a bit of a bearish flag at the moment that measures for a move to 1.12, which was an area that previously had been so important.
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If we do rally and break above maybe the 50-day EMA, then you can start looking at this as a market that could go as high as the 1.17 level. Ultimately, this is a market that I prefer for short signs of exhaustion after short-term rallies, but let's be honest, the market isn't exactly one that moves massively right away. More often than not, we see a lot of chopping like we've seen the last couple of weeks.
But the interest rate differential favors being short anyway, so that in and of itself pays you a little bit as you're waiting for the potential breakdown. I remain bearish in this market and have absolutely no interest in buying the Euro, at least not in this market and this situation we've gotten ourselves in with a weakening European Union and people still thinking the Federal Reserve could end up raising rates later this year.
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