The Euro has fallen a bit during the course of the trading session on Thursday to reach down towards the 200 day EMA. This is in reaction to the Federal Reserve “talking about talking about tapering.” That being said, it appears that the market has taken this to heart. That started to see a major negativity come into the marketplace and everywhere you looked the US dollar rallied. At this point though, I think that the overall attitude of the market is probably a bit overblown, so it will be interesting to see how we behave over the next couple of days. At this point, the 200 day EMA is going to attract a lot of attention.
EUR/USD Video 18.06.21
If we continue lower, then it is very likely that the Euro goes looking towards the 1.1830 level. This is where we bounce from originally, and it must be noted that this market has clearly gotten rattled. However, if we were to turn around and recapture the 1.20 handle, then that would be a very bullish sign in general. Ultimately, this is a market that continues to see a lot of interest, as the Euro is essentially the “anti-dollar.”
In the meantime, I would anticipate a lot of nervous trading and indecision to say the least. Because of this, I think we will continue to see a lot of choppy and volatile behavior, as the world waits to see whether or not the Federal Reserve is going to taper anytime soon. After all, the main culprit was the fact that the dot plot showed a couple of people are expecting higher rates in 2023.
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This article was originally posted on FX Empire