- As I look at the Euro, the first thing I see is that we tried to rally a bit during the early hours on Tuesday, only to give up those gains and show signs of hesitation.
- At this point, we continue to dance around the 1.05 level, an area that of course has been crucial for some time.
- And I think we need to pay close attention to what we do in this general vicinity. The candlestick certainly shows just how feckless the euro is at the moment, but I do think that if we turn around and rally from here, if we can break above the 1.09 level, that would be very bullish.
But that being said, it doesn't look like that's going to happen. We have to take a look at the 1.0775 level, and if we break down below there, then I think the market goes looking to the 1.07 level.
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The Fed Still Matters
Keep in mind, a lot of this comes down to the Federal Reserve and the way it may have to react to stronger than anticipated economic data.
Furthermore, the European Union looks as if it is in a little bit of trouble. So, I think it all ties together for a potentially negative turn of events. All things being equal, I am more of the thought process of waiting to see whether or not this level actually holds.
I wouldn't necessarily go into the market right now, but I think you have that binary decision. In other words, above the 1.09 level, you probably have to be a buyer. On the other hand, below the 1.0775 level, you probably have to be a seller.
Keep in mind how volatile this pair can be choppy, but I also recognize that once it starts moving, it does tend to trend for quite a while. Because of this, a certain amount of patience makes sense, and I think would be rewarded over the longer term.
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