The Euro rallied rather significantly during the trading session on Tuesday, and therefore the Wednesday session was a bit quiet as traders trying to digest the gains. After breaking a major level like the 1.20 level, it does make sense that traders would need to take a bit of a breather after the most recent surge. After all, breaking that level was something that the market had been trying to do for several months, and now a lot of traders around the world will have to reassess their position and thinking when it comes to the Euro.
EUR/USD Video 03.12.20
There was a lot of concern out there when it came to the ECB due to the fact that the last time the currency broke above the 1.20 level, it was talked back down by the central bank. However, the trade weighted Euro is not making massive highs, so it is thought that perhaps the central bank is not as concerned about this market as they once were. Certainly, after the bullish candlestick that we had seen on Tuesday it makes quite a bit of sense that we would take a breather, but obviously you should not be shorting this market. I think that a pullback towards the 1.20 level will almost certainly be bought into, mainly due to the fact that a lot of traders will either try to cover shorts, or perhaps trying to enter the market as they have missed the breakout.
At this point, the Euro is almost certainly going to go looking towards 1.23 level all things being equal based upon the longer-term charts. I have no interest in shorting.
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