The Euro rallied quite a bit during the Thursday session, hitting the 50 day moving average once more. At first, it looks like we will continue to sell, but we turned to show signs of strength later in the day. The market continues to pay close attention to interest rates in the US, which are starting to ease a bit. However, we still have a long way to go before we change direction.
The 50 day moving average is an indicator that a lot of people focus on, and it used to be a huge resistance. If the market breaks here, it needs to deal with the resistance at the 1.08 level almost immediately. The 1.08 level is the area that was previously supportive and should be resistance now. Market memory will be a major factor in this area. So I will focus on it if we show signs of fatigue. At this point, I am more than willing to sell this market because there are many reasons to believe that we can continue to see a stronger US dollar.
When you look at the chart, you can see how much we’ve been bearish, so one might assume that it’s just a matter of time before the sellers come back. If we break below the Wednesday candle, that opens a downward movement to the 1.06 level, which is the area that was resistance previously. However, if we pull back, I wouldn’t be surprised at all to see this market bottoming out once more. In the end, trends happen for a reason, and so one might assume it’s only a matter of time before they resume.
Pay close attention to interest rates in the United States, because if they start to rise once more, This is likely to lead to a decline in this pair. The European Central Bank recently indicated that a 25bp hike is on the way, but that pales in comparison to the 200bp hikes expected from the Fed. At this point, it’s been a good rally, but there has been no change in trend, at least not yet. However, I think this market will run out of bullish momentum soon.
The chart was generated by . platform TradingView
