The Euro has been negative for some time now, and the rising interest rates in the United States continue to put pressure on many other currencies.
EUR/USD
The Euro has been pretty ugly during the trading session here on Wednesday as word got out that the United States has, in fact, attacked Iran again. Interest rates in America jumped, and that, of course, put downward pressure on the Euro, or perhaps, possibly better put, upward pressure on the value of the US dollar. We are hanging around the 1.14 level, and this is an area that I think continues to be important.
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You should also pay attention to the fact that we are in the midst of forming a bearish flag. If we do continue to see this play out, it could send this market down to 1.12, which is an area that's been important.
The Bearish Flag and Key Technical Barriers
Now, that being said, I also recognize that this is a market that could go to the upside, and if it does then we are looking at the 50-day EMA, which is just above the crucial 1.15 level. The 1.15 level is an area that I think a lot of traders will look for some type of barrier. If we were to break above there, then it changes everything, but right now, we don't have any reason for the US dollar to fall, especially as there are so many concerns out there.
With concerns about interest rates rising in America and potential inflation, and the fact that people are running to the dollar for safety all at the same time, this tells me we will eventually break down unless something changes quite drastically. I just don't see it. I think 1.12 is more likely than 1.16 in this market.
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