Euro rallied significantly during Thursday, right into resistance

The Dollar will be looking to claw its way back and Draghi could well provide the necessary help, with stats through the day on the lighter side. · FX Empire

Christopher Lewis

Updated Thu, May 10, 2018, 10:13 PM

The EUR/USD pair has rallied significantly during the trading session on Thursday, mainly in reaction to the CPI numbers in the United States being a bit lower than anticipated. This have the algorithmic traders coming into the market right away, but as I record this it’s obvious that we are running out of momentum rather quickly. Because of this, I think that we should continue to go lower, but I think there is the possibility that we may bounce around in this general vicinity before falling again. After all, the Federal Reserve is the only central bank of the world looking likely to raise interest rates anytime soon, and that of course favors the greenback in general.

Contrast that with a consistent range of disappointing European economic figures, and it makes sense of this market continues to drift lower. Mario Draghi recently suggested that ultra-low interest rate should continue to be the case for the near-term, it has put a bit of negativity into the Euro anyway. With that being the case, I think that the market should reach towards the 1.18 level, and then possibly the 1.15 level over the course of the summer.

I believe that the 1.21 level above is a major resistance barrier, and I think that if we were to break above there we could send this market much higher, perhaps the 1.25 handle. I don’t think is going to happen, but it is a possibility to keep that potential in mind.