- The Euro rose during the trading session on Wednesday as we continue to pay close attention to resistance above.
- We had weaker than anticipated CPI numbers coming out of the United States, so that has helped the Euro.
- But really at this point in time, other markets as I look around the world are showing a certain amount of hesitation to truly embrace the idea of quantitative easing coming out of the United States.
So really at this point in time, I think this is a market that you have to watch very closely because it does serve as a bit of a proxy as to what’s going to happen with the US dollar overall. Ultimately, if we were to pull back from here, the 1.13 level in support followed by the 50 day EMA and the 1.12 level.
On a Break Higher
If the market were to break above the recent high near the 1.1570 level, then it’s likely that we see the euro rally towards the 1.1750 level. But the comments that the United States and China may be on the verge of a deal have thrown a little bit more volatility in the market as well. So, I think the market still is waiting to see if that deal actually gets signed and then it will determine what to do next.
Ultimately, this is a market that I think is at the top of a range. So, on signs of exhaustion, you may have a selling opportunity, but if you break above here, the previous swing high, then look out, we’re going to go racing much higher. I have no interest whatsoever in trying to get too big in this market right now, but I think it’s an excellent indicator as to what to do with the US dollar overall.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
