Created on April 29, 2025

• The Euro initially pulled back just a bit during the early hours on Monday, only to turn around and rally.
• At this point in time, this is a market that continues to see a lot of noise in this general vicinity between the 1.15 level and the 1.13 level.
• Underneath there, then we have a potential support level 1.12.

I think this is a situation where traders are trying to sort out which direction to go. In general, I think we’re working off some of that excess froth that was in the Euro previously due to the massive amount of ridiculous volatility. After all, traders were basically treating the US dollar like it was going to zero.

So now, cooler heads have prevailed, and we are starting to look around the world and trying to determine what happens next. I think you have a situation where we very well could go higher, but I think the best case scenario for those who are bullish on the Euro is that we go sideways for a while. You have to work off some of the momentum. On the other hand, if we get a very risk off type of situation, you could see the US dollar start to strengthen again.

Interest Rates Will Matter Eventually

Ironically, higher interest rates don’t seem to matter at the moment, but they will eventually. The Federal Reserve must keep its interest rates high for a while, at least to combat inflation. The Europeans may be heading in that same direction.

We’re still kind of wishy-washy when it comes to the European Central Bank. And I think that’s part of the problem here. So, no clear analysis other than it is a good thing to be in this range between 1.12 underneath and 1.15 above. We certainly have more of a tilt to the upside. So, if you are playing in this little playground here, you’re looking to buy short-term dips for short-term moves.

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