- The Euro has gone back and forth during the early part of the Tuesday session against the US dollar as we are below the 1.16 level.
- The 1.16 level is an area that previously had been support and now should end up being resistance.
- All things being equal, the market bouncing I think continues to offer a selling opportunity eventually, then the 1.1650 level I think is going to be a hard ceiling as well.
- I do think that we will go lower eventually and once we finally break down below 1.1550, it opens up a move down to the 1.14 level where the 200-day EMA currently sits.
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The 200-day EMA is an indicator that lot of people use for the longer term trend, and anything below there really gets traders very short of this pair. Remember, the US dollar was supposed to collapse, but after the FOMC press conference, it's done nothing but strengthen for the most part. That doesn't mean that the euro falls apart drastically and collapses, but what it does mean is that the narrative out there is 100 % wrong. That's typical for the markets these days, as so many people have become “experts” in the latest thing.
Once you start seeing a lot of memes being posted about the death of the dollar and amateur economists who have been trading for a total of three months predicting this, that's generally when you're getting close to the end.
So, at this point, we continue to fall. I think it's very real out there that the 1.1550 level being broken opens up the next wave of selling. If we do bounce from here, I'd be watching the 50-day EMA at 1.1670. I think that could be resistance in that situation.
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