- The US dollar tried to rally early on Wednesday but turned around to show signs of hesitation.
- By doing so, the market shows that we are still very much in a downtrend, and I think that continues to be the case overall.
- However, you can also make a huge argument that perhaps we are in the midst of trying to form some type of bottoming pattern, which is what we need to do to change the trend.
- While that doesn’t necessarily mean that we are going to change the trend easily, the reality is that there is at least a fight going on right now to turn things around.
Technical Analysis
The technical analysis for this pair is rather negative, but it is worth noting that the 0.79 level has been extraordinarily supportive model times, as it looks like it is going to possibly be an area where traders try to form a “floor in the market.” If we were to break below there, then it could send markets lower, but as things stand right now, it seems to be rather resilient.
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As long as that’s the case, then I think there is a little bit of a situation where traders are willing to “buy on the dips” to take some type of short-term trade to the upside.
The 50 Day EMA is sitting right around the 0.80 level, which of course, is a large, round, psychologically significant figure as well. If we can break above there, then the US dollar could go looking to the 0.81 and. This is the top of an overall consolidation range that we have been in, and if we were to break above that level, it would obviously change a lot of attitude when it comes to this pair in general. However, it’s also worth noting that both of these are considered to be “safety currencies”, and therefore, both are going to move for the same reasons at times, making this more of a choppy pair than anything else. I believe we remain somewhat neutral, but we definitely have some type of floor in this market.
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