- The euro remains weak against the US dollar despite expectations of dollar softness after the FOMC meeting.
- Resistance looms near 1.17, with potential downside toward 1.14 if 1.1550 breaks.
- Buying remains unattractive unless above 1.18.
The euro has gone back and forth during the trading session here on Friday but shows an overall positive attitude. Therefore, I’m very interested in this market at the moment because what I’ve noticed and talked about multiple times here at Daily Forex is that the euro has essentially just fallen since the FOMC meeting announcement, when supposedly we were going to see the US dollar fall apart. It’s pretty much done everything that it wasn’t supposed to do, which of course means something to those who are paying attention.
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Not Rising is Falling After All…
I think this is telling us something. I believe it shows that the euro has a lot of underlying weakness. I’m looking around the 1.17 level for a potential shorting opportunity, although the 50-day EMA between here and there may also offer that chance. Over the longer term, this market did break a major uptrend line and is now underneath the 50-day EMA. If we break down below the 1.1550 level, it opens up a move down to the 1.14 level, something I think we might see.
On a move to the upside, we’re not really interested in buying the euro, but if we broke above the 1.18 level, I’d have to shift all of my expectations because sometimes a trend line break is just a market going sideways and working off some of the froth. That could be what’s going on here, but really, I don’t know. This is an area that’s been important multiple times in the past, so falling from this general vicinity isn’t exactly unprecedented.
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