I will not be a buyer anytime soon, and I think that the bearishness will continue for quite some time.
- The EUR/USD currency pair has done very little yet again during the day on Thursday as we continue to hang around the parity level.
- The parity level is an area that I think will continue to be a bit of a magnet for the market, as it is a large, round, psychologically significant figure, and a lot of people will be paying close attention to it.
- The market is going to continue to see the noise more than anything else and see the idea of the parity level as a bit of a difficult number to get your head around.
EUR/USD Bear Market
That being said, the Tuesday candlestick has told us just how bearish this market truly is, and I think that the Euro will continue to be like a punching bag for almost everybody. This is especially true for the US dollar, as it is the strongest currency that I follow right now, and I think it’s going to continue to be as there is a lot of risk-off behavior out there. The European Union of course has to worry about the overall economy in the European Union this winter, as they will have to worry about energy, and we are already starting to see concerns about manufacturing shutting down.
While the ECB pretends it will be very tight in the future to fight inflation, the reality is that it won’t be able to do so aggressively. The economy in places like Germany just will not be able to handle that. Because of this, I think it’s only a matter of time before all rallies get faded, and we see a lot of negativity back in this chart. The 50-Day EMA is sitting right around the 1.0150 level and is dropping. Ultimately, I think we’ve got a situation where we continue to see a lot of volatility, but anytime the Euro even tries to rally, there will be plenty of people to jump on the first signs of exhaustion. On the other hand, we could break down below the bottom that we just made a couple of sessions ago, opening up the possibility of a move to the 0.98 level, possibly even 0.96 level after that. I will not be a buyer anytime soon, and I think that the bearishness will continue for quite some time.