The Euro exploded to the upside during the trading session on Monday to kick off the trading session and reach towards the psychologically and structurally important 1.12 handle. This is an area that has previously been significant support, analyses the 50 day EMA racing towards it. This is a very bullish candle stick, but we are most decidedly in a downtrend, and continue to see sellers come back in every time we rally.
The Federal Reserve has recently suggested that there could be a bit of easing coming in the monetary policy, but it hasn’t exactly been clear about. Because of this, and the fact that we already know that the European Union has a whole host of problems, not the least of which is the United Kingdom leaving in a very loud and messy way, it makes sense that the US dollar should continue to strengthen. Ultimately, you can see that the market tends to move in 100 pips increments, so this point it’s very likely that we will see a push back to the recent bounce. I anticipate that the 50 day EMA should cause a bit of resistance, perhaps pushing back down towards the 1.11 handle which has been so important in the past.
The alternate scenario of course is that we slice rate through their, and a break above the 1.1230 level opens up the door to a potential move of 1.13 above. Ultimately though, I do like fading rallies as there is so much in the way of political and geopolitical uncertainty out there that it makes sense the US dollar will continue to pick up due to the fact that the treasury markets have been attracting so much attention. Longer-term, I believe that the market is probably going to make an attempt to the 1.10 level underneath, but we are getting close to very over extended levels.
The Federal Reserve has recently suggested that there could be a bit of easing coming in the monetary policy, but it hasn’t exactly been clear about. Because of this, and the fact that we already know that the European Union has a whole host of problems, not the least of which is the United Kingdom leaving in a very loud and messy way, it makes sense that the US dollar should continue to strengthen. Ultimately, you can see that the market tends to move in 100 pips increments, so this point it’s very likely that we will see a push back to the recent bounce. I anticipate that the 50 day EMA should cause a bit of resistance, perhaps pushing back down towards the 1.11 handle which has been so important in the past.
The alternate scenario of course is that we slice rate through their, and a break above the 1.1230 level opens up the door to a potential move of 1.13 above. Ultimately though, I do like fading rallies as there is so much in the way of political and geopolitical uncertainty out there that it makes sense the US dollar will continue to pick up due to the fact that the treasury markets have been attracting so much attention. Longer-term, I believe that the market is probably going to make an attempt to the 1.10 level underneath, but we are getting close to very over extended levels.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.