The Euro showed some strength in Monday's trading session as it continued its upward momentum against the US dollar. Despite initially pulling back, the currency rallied and kept pushing higher. This is a positive sign for traders who are betting on the Euro to keep gaining value. However, the 1.10 level remains a psychological barrier that traders will be closely watching.
The Euro has been able to slice through the 1.10 level before, so it's not impossible to break through again. If it does break through, the next target would be the 1.1250 level. However, this will take significant effort. If the Euro continues its upward momentum, it could reach the 1.15 level. Nevertheless, traders should be cautious as the market is likely to be choppy and noisy, particularly due to the ongoing earnings season and the uncertainty around the Federal Reserve's actions.
In case of a pullback, there are support levels near the 1.09 and 1.08 levels, with the latter also being the location of the 50-Day EMA. The EMA's steady rise indicates that the market is in an uptrend. If the Euro can hold these support levels, it would give traders more confidence in the currency's upward momentum.
The market is uncertain about the Federal Reserve's actions and is now paying more attention to the European Central Bank (ECB). The ECB has stated that it will continue to fight inflation, which is similar to the Federal Reserve's stance. However, traders seem to be placing more faith in the ECB's words, which is driving the Euro's upward momentum. It remains to be seen whether the ECB will continue to be hawkish and how it will influence the Forex market.
The Euro's continued upward grind has significant implications for the Forex market. Traders who have positioned themselves to benefit from the Euro's gains will likely see profits. However, traders should also be cautious as the market is likely to be choppy and noisy. As always, managing position sizes is essential, particularly during periods of uncertainty and high volatility. Traders should also keep an eye on the ECB's actions and statements, as they will likely have a significant impact on the Euro's value.