The US dollar has been on the ropes for a while, but over the last week or 2 we have seen it stabilize near the 104 level. The 104 level is also the 50% Fibonacci level on the longer-term charts, so we are most certainly in an area where we are going to see quite a bit of interest. Beyond that, we also have the FOMC Meeting Minutes coming out late in the day, so it does make a certain amount of sense that the market will react accordingly. After all, they will have to pay close attention to the idea of whether or not the Federal Reserve is going to do over the next several months.
- The market seems to have quite a bit of support at the 103 level, which is an area where we would also see a little bit of support based upon the 61.8% Fibonacci level.
- If a breakdown below that level, then we could continue to go much lower.
- You should also keep in mind that the 50-Day EMA is dropping and getting ready to cross below the 200-Day EMA, which kicks off the so-called “death cross.”
- In that scenario, we could see quite a bit of downward pressure. However, if we break above that level, then it’s likely that we could go to the 107.50 you level.
If we can break above the 107.50 level, then it’s likely that we could go to the 113 level given enough time. With this being the case, I think we’ve got a situation where we have a lot of noisy behavior and could make a bigger move over the next several weeks. I do think that given the fact that we have the FOMC Meeting Minutes coming out during the day, it’s likely that we will see a lot of volatility. After that, we have the jobs number on Friday, which also will cause a lot of volatility. After all, the world is worried about what the Federal Reserve is going to do, and these next 2 fundamental announcements could open up the possibility of getting clarity for once. I don’t necessarily have an opinion at this point, but it is worth noting that we are hanging around and going sideways after a significant pullback in what had been a strong uptrend.
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