- The EUR/USD has been very noisy during the trading session on Friday, showing signs of a little bit of bullish pressure, but quite frankly we are hanging around the same area that we have been around for a while.
- The 1.08 level underneath is an area that’s worth paying close attention to, because it seems like every time, we break above there, it’s likely that we continue to see plenty of sellers since we just don’t have momentum.
- On the other hand, if we can break above the 1.09 level, then it’s likely that the market could go looking to the 1.10 level.
If we were to break down below the 1.0750 level, then it’s possible that we could go down to the 1.06 level where the 50-Day EMA is hanging around. The 50-Day EMA has broken above the 200-Day EMA, forming the “golden cross” that a lot of long-term traders like. Nonetheless, this is a situation where there are a lot of questions as to what the European Central Bank is going to do because they do continue to say that they are going to be tight, but the same time so does the Federal Reserve. Whether or not people believe the Federal Reserve is a completely different question, because the market has seemingly flown in the face of everything that the Fed has stated. After all, they plan on keeping interest rates high for quite some time, so it’ll be interesting to see whether the market finally listens to them.
Pay Attention to Risk Appetite
You should also pay attention to the risk appetite around the world because it will have an influence on what happens with the US dollar as well, as it is a major safety currency. If we get some type of massive selloff, that will bring the strength of the US dollar back into the picture, and a lot of people will rush right back into it. It’s difficult to see how that happens yet, but quite frankly there are enough moving pieces out there that you cannot completely roll out some type of big selloff.
If we break above the 1.09 level, then it’s likely that we could go looking to the 1.10 level, possibly even the 1.1050 level after that as we have seen interest in that area previously.
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