The Euro rebounded significantly from the 1.04 level during the trading session on Thursday, as it returned to the previous support level with a large amount of “market memory” achieving a bit of stability. At this point, the Euro has been oversold, so it makes sense that we would have a willful recovery. With this in mind, The market will likely continue to see sellers above, so I think it’s only a matter of time before the sellers get back into the picture and put pressure on the EUR.
High interest rates in the US and a tight central bank are causing a lot of money to flow into the US dollar, not least because of the fear that exists in the markets. If we break below 1.04, I think we will eventually do that, as this opens the door for the Euro to move towards 1.02 over time, and maybe even reach parity by the end of the summer. In this environment, moves happen very quickly, so be aware that you can see a lot of tumultuous behaviour, but the trend is still crucially a downside.
The 50 day EMA is up and skewed downward, so I think it might only be a matter of time before it presents a certain amount of dynamic resistance that people will demand, and start selling again. Next, we have the 1.08 level as an important resistance, and I think if we suddenly get to that area, there is a lot of selling between that level and the 1.09 level to watch. I won’t consider buying this pair until we get through all of that, despite the fact that this was an impressive rally. However, it can also be a bit bullish, but by the time we get through the weekend, I’m thinking there will be more bad news people want to get in. With this said, I am waiting for the candle showing exhaustion and will start selling again as soon as I get it. Until then, I’ll wait for my chance to get “cheap US dollars”.
The chart was generated by . platform TradingView