- The US dollar bounced a bit during the early hours on Tuesday, as the 10.65 SEK level continues to offer a certain amount of support.
- We are hanging around the 38.2% Fibonacci level and are also sitting just below the 50-Day EMA, which of course in and of itself will be very important.
- If we can break above there, then the market is likely to go looking to the 10.81 SEK level above, where we have broken down from in the middle of the last week.
Underneath, we have the 200-Day EMA near the 50% Fibonacci were to level, and therefore I think we are essentially stuck between the 2 major moving averages that a lot of people pay attention to. If that’s the case, then we could expect some type of explosive move but right now we have to determine which direction that will be. I suspect it could be to the upside, but I will let the market decide which way we break before putting money to work.
We are still in an uptrend
The market has rallied rather significantly during the course of the year, but there have been a couple of significant pullbacks. At this point, we are in the midst of one right now and I wonder whether or not it makes any difference that we have already seen this a couple of times this year? I suspect it does, and I also suspect that sooner or later traders will try to find “value” in the United States dollar. Ultimately, this is a market that breaking above the top of the shooting star from Friday of last week could send the FOMO trader back into the market and we could not only reach the previously mentioned 10.81 SEK level, but possibly even break the 11 SEK level.
Keep in mind this is a pair that doesn’t typically move erratically, and it is a rather slow-moving pair. However, it does tend to trend for long periods of time and that of course is something that is crucial to keep in mind when putting on positions and being forced to find a bit of patience as you wait for the market to prove your thesis.
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