The Euro has initially tried to rally during the trading session on Friday but gave back the gains to drift towards the 1.21 area, which also features the 50 day EMA. Whether or not we continue to drop from here is a completely different question, but I think at this point we are likely to continue seeing a lot of choppy behavior. We might be a little “heavy” in the short term, but it is not until we break down below the 1.20 handle that I think the buyers would be in trouble.
EUR/USD Video 14.06.21
As we head into the weekend, I think a lot of traders are probably going to simply sit on the sidelines and allow this thing to drift sideways. The 50 day EMA does tend to attract a lot of attention, so is very possible that we could be taking a look at the market offering short-term support.
The most likely scenario is that we simply bang around during the summer as it looks like volatility is being sucked right out of the market. The Euro has gotten a bit of a boost as of late due to the idea that the market is punishing the US dollar overall with all of the spending and the potential inflationary issues in America. Nonetheless, the market had gotten a bit over stretched so at this point I think what we are seeing here is a simple correction for a bigger move. However, that bigger move may not be until fall, as summertime tends to be rather choppy and sideways overall.
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