The forthcoming days are poised to be of utmost significance for the euro as we find ourselves at a critical technical juncture. A cursory glance at the charts reveals the presence of the 200-Day EMA within this pivotal zone, casting its shadow alongside the zenith of the bearish flag. Furthermore, the vicinity surrounding the 1.0750 mark has proven its mettle on multiple occasions in the past, setting the stage for an impending technical showdown. While the immediate future remains cloaked in uncertainty, the market must still substantiate its bullish inclinations, despite the fervent ascent witnessed towards the latter part of the previous week.
The spotlight shifts to Powell's scheduled remarks this week, possibly serving as a potent reality check for Wall Street. If such an eventuality materializes, it is likely that yields will vault skyward once again. In light of this, it would be reasonable to anticipate a modest retracement. The scale of this correction, however, remains shrouded in ambiguity. Nonetheless, one certainty prevails: this is not the opportune moment to recklessly pursue trades. After all, there are a lot of moving pieces at the moment, which don’t necessarily have to do with these currencies directly. If you have already staked a claim in the euro, consider yourself fortunate. Nevertheless, it is sagacious to acknowledge that we now find ourselves at a juncture where the contest escalates, signifying that the era of facile gains may have drawn to a close.
Be Patient
- Incorporating the 1.08 level into the equation holds the potential to recalibrate the entire market outlook. At this juncture, we confront a pivotal turning point, one that beckons us to allow the market to chart its own course before deploying our capital.
- The wisdom of Jesse Livermore resonates: "We get paid to wait." This counsel is eminently pertinent in the current context. If this indeed heralds the commencement of a substantial trend shift, ample time remains to participate.
- Conversely, endeavoring to preempt the market's maneuverings has, over time, proven to be fraught with pitfalls and premature exits from positions. The virtue of patience emerges as an invaluable asset in the current scenario, promising to yield significant dividends in due course.
Potential signal: If the Euro takes out the low on Friday, I am a seller again. I would aim for 1.0510, and have a stop at the 1.0750 level above.
