Euro Flirts With the 1.08 Level

[ad_1]

It is not until we break above the 1.12 level that I would consider buying the Euro.

The Euro has rallied ever so slightly during the trading session on Tuesday to test the 1.08 level, an area that previously had been so supportive. The fact that we bounced to that area and found a bit of selling pressure is not a huge surprise, considering that we are in a major downtrend, and of course, this is an area that has been important multiple times.

Advertisement

The 1.08 level is significant, but it is also significant to understand that there is a lot of noise between there and the 1.06 level, which is worth noting as even if we were to break down through all of that, it more than likely will be choppy and noisy, so it will be more of a grind lower than anything else. Because of this, you will have to be very patient if you are shorting this market in this general vicinity. Furthermore, it is worth noting that the Thursday candlestick has been very negative, so if we were to break down through the Thursday candlestick from last week, that could be a signal to get short.

Signs of exhaustion should continue to be looked at as an opportunity to short the market and pick up “cheap US dollars.” After all, the ECB is nowhere near tightening monetary policy, while the Federal Reserve is almost certainly going to be extraordinarily tight going forward. Inflation and the bond market are both going to force the Fed to become very hawkish, and as long as that is going to be the case, it the very likely that we will see this pair favor falling.

In fact, it is not until we break above the 1.12 level that I would consider buying the Euro, but that would take a significant amount of effort, perhaps more effort than we are likely to see. Quite frankly, the only thing that I can imagine is that the world can throw at this market in order to make a turnaround in its overall trend if the Federal Reserve decides that it is going to completely abandon the overall hawkish attitude, which is something that looks very unlikely considering that the United States is seeing inflation that it has not experienced in over four decades. In that scenario, it is difficult to imagine that the Federal Reserve will do everything it can to fight it.

EUR/USD Chart

[ad_2]

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading in Contracts for Difference (‘CFDs’) carries a high level of risk and can result in the loss of all your investment. As such, CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever. For more information about the risks associated with trading CFDs please find and read our ‘Product Disclosure’.


Please recognize that this website is the only official website, please do not enter other clone websites through Internet search or advertisements.


© 2011 - 2024 mgtinvesting.com. All Rights Reserved.

en_USEnglish