- In my daily analysis of the EUR/USD pair, I continue to focus on the 1.03 level below.
- This is an area that has acted as support on both Monday and Tuesday, and it’s also an area that’s been important multiple times in the past.
- As things stand right now, think you got a situation where rally still have to be looked at with suspicion, as the European Union is most certainly lagging the United States.
Side note, it’s worth noting that the European Union has roughly the same size economy that it had 20 years ago, while the United States has doubled its economy. This is a thing that tells you everything you need to know.
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Technical Analysis
I believe that the technical analysis for this market is still very negative, but that doesn’t necessarily mean that you want to short market at extremely low levels. In fact, I would like to see a bit of a bounce so that I can start fading again. This is how I traded in this EUR/USD market for about 2 months now, and so far, it’s worked out quite nicely. The 50 Day EMA is near the 1.0425 level and is dropping. I think that more likely than not will end up being an area that a lot of sellers will enter.
What I need to see is a higher and a long wick to the upside showing signs of exhaustion. As far as buying is concerned, I have no interest in doing so, at least not until we break above the 1.06 level. The level of 1.06 is roughly where the 200 Day EMA is currently sitting at. It’s not until we break above all of that that I think you have a situation where the euro starts to take off to the upside for a sustainable move. Anything between now and then is probably just going to be in the vein of an opportunity to “pick up cheap US dollars.”
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