The Euro poised to go lower from current levels
The single European currency is struggling to hold on to its gains from this morning as escalating tensions between Russia and Ukraine are driving safe haven demand to the US dollar. The pair is currently trading at 1.3879 and we favor buying daily puts for tonight's expiry
Despite the strong start to the day and the subsequent rebound from levels below 1.3850 marked in Asia, the pair's momentum to the upside seems to be slowly exhausting. At this juncture we will wait for the release of producer price inflation data at 12:30 GMT.
The gradual move up in this binary options forex pair has been going on for a while, so after the failure to hold above 1.39 the issue here is becoming whether or not we can sustain 1.38. If that level gives out in the coming couple of days, the downside will be open further.
University of Michigan's Consumer Price data is also crucial in providing more insight behind the US dollar outlook, however geopolitical factors are more likely to impact the market in the coming couple of days.
With the pair dipping from about 1.3970 in the middle of the week to current levels, the upside will be reiterated only if we see a daily close above the 1.3915-20 area. If that is achieved a retest of recent 12 month highs is likely.
The downside looks much more exposed as the pair has already tested multiple times the 1.3840-50 area. Once we see a break below, hourly put options are not to be ignored - in fact they could provide even more trading activity on the market.
That said be vigilant of any sharp developments surrounding Russia and Ukraine tensions. If we see some relief in the coming sessions, it is very likely that the euro could head towards 1.40 again. For now we'll look ahead to the weekend, while avoiding to miss this last trading opportunity.