[ad_1]
\n<\/p>\n
The euro<\/a> initially tried to rally during the trading session on Tuesday but gave bank gains as it looks like we are continuing to see the US dollar strengthen overall. That being said, the market is likely to continue to go lower, perhaps reaching the 1.06 level. Ultimately, this is a situation where the market is continuing to focus on inflation, and of course we have the CPI numbers on Wednesday, and the ECB announcement on Thursday.<\/p>\n<\/div>\n<\/div>\n In other words, there\u2019s a lot of volatility out there just waiting to happen and therefore I think we will continue to see choppiness between now and those 2 major announcements. Once we get through those announcements, we might have a bit of a believable move, but right now it just looks like we are setting up for more negativity, although a lot of people won\u2019t be willing to put a ton of money in the market at the moment.<\/p>\n If we turn around and rally from here, the 200-Day EMA sits at the bottom of a significant channel, and therefore should offer resistance based on \u201cmarket memory.\u201d With that being the case, I think you have a situation where you continue to fade rallies, but I don\u2019t necessarily think that we are going to see some type of major meltdown unless we get a shock out of the system. I think we are more or less trying to confirm a downtrend at the moment, so I like fading rallies, but I also recognize that you will have to build a position, instead of trying to jump in with a massive amount of position sizing.<\/p>\n In general, if we can break above that 200-Day EMA, it\u2019s really not until we break above the 50-Day EMA that I see a huge shift in the market and an attempt to recover for a bigger move. In general, keep an eye on interest rates but what I would point out is the fact that the rates have been rising in the United States, and therefore it suggests that the market is going to continue to find the US dollar attractive going forward.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>.<\/p>\n<\/div>\n<\/div>\n