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The euro experienced a decline on Friday as interest rates in the US continued to increase.
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While interest rates are also rising in Germany, traders seem to be feeling anxious about the current situation in the Middle East. It might be wise for them to wait for further news to gauge any potential progress towards peace.
There’s not much advancement happening, and eventually, energy inflation will be a concern. Europe is in a more precarious position compared to the US due to various self-imposed environmental regulations and drilling moratoriums. This could lead to natural gas and crude oil shortages that would negatively impact Europe.
Vulnerabilities and support levels
A bounce back from this point, coinciding with the 200-day EMA, could offer a short-term chance for those wanting to lessen selling pressure. However, I personally would prefer to see some signs indicating a rebound and subsequent depletion before considering shorting again.
It seems to me that the EUR/USD pair will remain in its current range for quite a while. Interestingly, the euro is more or less valued the same as it was back in 1990. So, despite all the fluctuations over the last two decades, it hasn’t really changed all that much.
If it drops below the 200-day EMA, we could see it fall to around the 1.14 level, which I see as a significant support point. The 1.15 level might also act as support. At this stage, I have my doubts about Larry.
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