Market Analysis:
- The Euro (EUR) has seen a minor rally on Monday, finding support at the 200-day EMA.
- The market remains stuck within the established consolidation range between 1.07 (support) and 1.10 (resistance).
Central Bank Influence:
- Both the Fed and ECB are expected to loosen monetary policy later in 2024, potentially weakening both the EUR and USD.
- This suggests the EUR/USD pair might be a better indicator of broader US Dollar strength rather than a standalone trade.
Trading Strategy:
- A breakout above 1.10 or below 1.07 would be a significant event.
- In the absence of a breakout, expect continued choppy and range-bound trading.
- The EUR/USD market may offer clues about the US Dollar’s performance in other currency pairs.
Key Points:
- Market Consolidation: The EUR/USD is likely to remain range-bound for the near future.
- Central Bank Dovishness: Loose monetary policy from both the Fed and ECB could weaken both currencies.
- EUR/USD as US Dollar Gauge: The Euro’s performance against the Dollar might reflect the Dollar’s overall strength.