- I analyze the Euro’s modest rebound and continued weakness against the U.S. dollar.
- Despite short-term fluctuations, I remain bearish, watching 1.1550 as resistance and 1.14 as key support, anticipating potential further downside.
The Euro has rallied a bit during the trading session on Thursday, but at this point, it looks like the 1.1550 level is an area that previously had been support and resistance from a minor standpoint. The fact that we bounced back to that area and are now struggling a bit is not a huge surprise. This is a pair that’s been in a downtrend since the FOMC meeting in September.
I remain short of this market. Any signs of exhaustion, I think, open up the possibility of shorting. The interest rate differential continues to offer opportunities. If we break down from here, the 1.14 level is a significant support level, with the 200-day EMA in that same area as well.
Top Regulated Brokers
The 50-day EMA is at the 1.1628 level, and if we can break above there, then I do think that could start to change some things. But all things being equal, I still like the U.S. dollar. I think the dollar has bottomed in general, though there is the occasional opportunity to short a bounce here. At this point, I have no interest in owning the Euro.
The Importance of 1.14
If we were to break down below the 1.14 level, then I think the trap door opens up, and we could drop down to the 1.11 level. All things being equal, this is a market that I think continues to have a lot of wiggles from time to time. But overall, we have broken down enough to show that the U.S. dollar is, in fact, starting to strengthen. I think we could start to see a pretty significant drop, though it’s not necessarily going to be a meltdown; it’s something that will take a certain amount of time.
Ready to trade our daily Forex analysis? We’ve made a list of the best online forex trading platform worth trading with.