- The EUR/USD rallied a bit during the trading session on Wednesday, but as you can see, we continue to bounce around the same area.
- The 1.05 level has attracted a lot of attention, and it is probably worth noting that the last couple of days have seen late selling of the Euro, or perhaps it’s probably better to put that we have seen a lot of late-day buying of the US dollar.
- Whether or not that continues remains to be seen, but it certainly looks as if we are seeing quite a bit of question asked about global growth and risk appetite.
The 200-Day EMA sits just below, so if we were to break down below that level, it’s possible that the 1.03 level will be tested next. Keep in mind that you must pay close attention to the industry market because I can give you a bit of a “heads up” as to what the US dollar is doing. Interest rates have been rather noisy, mainly because people are worried about the Federal Reserve meeting next week. It’s not so much what they are going to do as far as hikes are concerned, but the statement that accompanies it.
US Dollar Likely to Bounce
If we break above the 1.06 level, then it’s possible that the Euro goes looking to reach the 1.08 level, but it will more likely than not take some time to get there. After all, this pair very rarely just takes off in one direction or the other. The market had been in a major downtrend for ages, so even though we’ve had a nice rally, we haven’t necessarily wiped all of that out.
Furthermore, it also points out that you could make an argument for a rising wedge, so we’re not completely out of the danger yet, especially if the Federal Reserve does sound very aggressive at the meeting next week. In the meantime, I think we probably got a grind sideways but with more of an overall upward tilt to it. If we break down below the 200-Day EMA, that could be the beginning of something a little more serious for the US dollar. It’s probably also worth noting that the US Dollar Index is showing signs of trying to bounce for a bigger move as well, so keep that in mind.
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