On Monday, the euro experienced a brief consolidation below the resistance level of 1.0882. The Marlin oscillator also showed a slight decline. A breakout above this level could lead to a target of 1.0949, followed by potential growth towards 1.1027, which is the low from September 3, 2024.
On the four-hour chart, the price consolidation before the resistance level is more apparent. The Marlin's signal line is turning upward from the neutral zero line, indicating a slow but steady uptrend, driven by optimism about European economic growth and stability.
However, a key factor could reverse this trend and lead to a downward movement—a near-panic flight from risk. The S&P 500 fell by 2.70%, the Nasdaq by 4.00%, oil by 1.20%, gold by 1.20%, and copper, a crucial indicator of economic optimism, by 1.33%. Meanwhile, the yield on 5-year U.S. Treasury bonds has dropped from 4.08% to 3.90% since Monday.
As long as investors continue to move their funds into government bonds, the euro may continue to rise quietly. However, if market conditions worsen further, investors are likely to start purchasing U.S. dollars.
