- In my daily euro analysis, it’s easy to see that the 1.09 level continues to be a massive barrier in this market as we slammed directly into it, only to give up the gains at this point in time.
- I think you’ve got a situation where traders are going to continue to bounce around between the large, round psychological, significant figure of 1.09, 1.08 and 1.07, and really, at this point, I just don’t see how this market gets moving.
The consumer price index numbers were lower than anticipated during the trading session and at this point in time, that had the euro taking advantage of a weak US dollar as yields drop but at the end of the day, the question then becomes whether or not Europe’s really any better. Furthermore, you have to keep in mind that the market is going to be a market that is looking at the possibility of just more malaise.
From an EUR/USD forecast perspective, the Euro is a good place to watch money do nothing, and that doesn’t look like that’s change. Unless of course, you’re a short term trader. Then you can go from one big figure to the next but ultimately, at this point, I think you’ve got a scenario where traders are just simply trying to sort out what they’re going to do next.
PPI and Summer
The PPI numbers on Friday could very well turn around and tell a completely different story. That’s happened multiple times this year so Wall Street may have jumped the gun. If we can break above, the 1.09 level, could open up the euro for a move to the 1.10 level above there but I’m not holding my breath. If we were to break down below 1.08, then it does open up a move down to 1.07, which is where we were just a couple of weeks ago. Furthermore, keep in mind that we are in the midst of summer and that typically means sideways nonsensical trading.
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