[ad_1]
Right now, short-term traders will probably try to pick this market up, but I have no interest in trying to pick a bottom here.
The EUR/USD pair fell significantly Friday only to turn around and show signs of life. The market is above the 1.02 level, which is an area that I think a lot of people will pay close attention to, and it’s likely that the buyers may be a little bit greedy. However, we need to break above the highest of the previous three sessions to get things going, and at that point in time, we could go to the 1.04 level.
The shape of the candlestick is a bit of a hammer, so that does suggest that perhaps there is a certain amount of support underneath. That being said, the ECB raising interest rates by 50 basis points was a bit of a shock to the market, so I think that’s part of what we are trying to price in. However, the 1.04 level above is the beginning of a significant area that had previously been important, therefore “market memory” could come into the picture and offer quite a bit of resistance. Furthermore, the 50-day EMA sits just above there and is falling, so it’s likely that we will see quite a bit of technical resistance there as well.
We are in a very strong downtrend, so I think it’s probably only a matter of time before we continue. This will be especially true if the Federal Reserve suddenly decides to raise interest rates by 100 basis points, which is what initially sent the euro down to the parity level. Ultimately, this is a market that I think continues to see a lot of shaky volatility, but if you are patient enough, then it’s likely that you would see an opportunity to short this market again. Right now, short-term traders will probably try to pick this market up, but I have no interest in trying to pick a bottom here.
If we do eventually break down below parity on a daily close, then it’s likely that we could drop much more significantly. The fact that the European Union continues to see a problem with energy suggests that the economy is in real trouble, just as the ECB is trying to raise interest rates. I see nothing good coming from the European Union anytime soon.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex trading platforms to check out.
[ad_2]