- The EUR/USD initially fell during trading on Thursday as the downtrend continued.
- The Consumer Price Index came out during the session, with a reading of 0.4% month over month instead of the projected 0.2%.
- This sent the US dollar higher for the short term, but as time went on traders decided to start looking through the report and coming up with some type of narrative to make things positive.
This ended up sending the Euro higher, and now it looks like it is during some type of recovery. Quite frankly, I think that’s a good thing because I would like to pick a “cheap US dollars”, which is something I cannot do unless this pair bounces. The 50-Day EMA sits just below the parody level, which of course also features the downtrend line. This is an area that I think will be difficult if not impossible to break above, so I would be very interested in shorting this pair if we get somewhere near there and show signs of exhaustion.
I Have no Interest in Buying this Pair
If we did some outbreak above the parody level, that would obviously be a very bullish sign and it could change some things, but right now I would need to see some type of fundamental reason for this pair to turn around and take that out. I anticipate that it’s going to be very difficult to do that, so I think it’s only a matter of time before we would see sellers come back into the market. I will be looking for signs of exhaustion that I can start shorting, but right now I obviously do not have that. We also have the weekend coming up, so it’ll be interesting to see how this plays out as the traders out there will have to decide whether they want to hold Euros heading into the weekend.
Because of this, I will probably be on the sidelines during the Friday session, but I will be looking and hoping to get signs of exhaustion that I can start selling. On the other hand, we could just turn around and take out the bottom of the candlestick without doing any type of rally, which of course is also a very strong sign of US dollar strength. Regardless, I have no interest in buying this pair, so I think it’s only a matter of time before I will be short.
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