- The Euro has initially rallied against the US dollar during the trading session here on Wednesday but then gave back a bit of the gains to turn around and show a massive shooting star by the time the Americans fully have the market in their hands. The 1.18 level continues to be a major barrier to overcome that we just really haven't seen happen yet.
- So, with that being the case, I think you have to look at this through the prism of a market that given enough time, we'll have to make a bigger decision. And to me, it looks like we are running out of momentum.
- If we fall from here, it's likely that we could go looking at the 50 day EMA. The 50 day EMA offer support, but breaking down below there, then opens up the possibility of an uptrend line coming into the picture for support. Beyond that, then we have the 1.16 level.
Is the Trend Changing?
Ultimately, this is a market where I think anything below starts to show a trend change. What I do know is that after the FOMC meeting, the euro has not been acting quite correctly since then. We've had a couple of positive days here and there, but the momentum is most certainly to the downside and looks likely to continue to be in this environment. I think we have a couple of days of sideways action as traders try to sort out what to do about the lack of a non-farm payroll announcement. At least that's what's expected now. And that of course has people wondering what happens next. If the Federal Reserve is in fact going to start cutting rates in the federal funds futures rates, do suggest that then you would think that the US dollar is weakening, but if they are starting to cut them rapidly, that's normally a sign of trouble. You get into trouble; you have people buying US Treasuries. So, I'm actually expecting a trend change, but we have a couple of hurdles to get beyond the downside before I actually start putting money to work.
Top Regulated Brokers
Ready to trade our Forex daily analysis and predictions? Here are the best trading platform for beginners to choose from.