- The Euro has fallen a bit during the trading session here on Thursday, as we continue to see the US dollar strengthen in general.
- With that being said, the US dollar is starting to really start to fall into the favor of traders as the markets are nothing but down in the Euro against the US dollar since the FOMC meeting.
- In fact, that's true with almost every currency pair. And as a result, this is one of those arguments that you shouldn’t be trying to guess what things mean. You should just simply follow price.
- Price is going lower. It shows that there is more US dollar strength and now that we have broken through the 1.16 barrier, I think it opens up the possibility of a move down to the 1.14 level.
200 Day EMA Approaching
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The 200 day EMA continues to approach that area offering support. And I think you've got a scenario where traders are going to try to reach towards that area. The market breaking down below the 200 day EMA, will certainly open up the floodgates. At this point, I look at short term rallies as opportunities to sell at the first signs of exhaustion.
I think we're in the process of a potential trend change as the euro looks so soft at this point, to get all of that dovish information out of the Fed and then to see the US dollar strengthen that tells me people think are starting to worry about the overall global economy and they're going to run to the safety of the U.S. as they will often do. However, I would expect some noise along the way, and I don’t think that the market is simply going to “fall off of a cliff.”
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