[ad_1]
It is not until we break above the 1.12 level that I would consider buying this market.
The Euro initially rallied during the trading session on Wednesday, but then pulled back a bit from the highs. We had a Federal Reserve meeting and announcement during the day, so it is not a huge surprise to see that things were a bit volatile. Ultimately, this is a market that still sees a lot of resistance above, so I think is probably only a matter of time before we start selling again.
The 1.11 level above is the beginning of significant resistance to the 1.12 level, and then of course we have the 50 Day EMA drifting down below it. Because of this, I think it is only a matter of time before we see the sellers come back into the picture. Any signs of exhaustion will more than likely be jumped upon, and I do believe we have further to go to the downside. After all, the German ZEW shows just how dire the attitude is in the European Union, as it came out at -39 instead of the expected +5. Business confidence falling like that is not a good sign.
There are concerns about inflation and of course the war in Ukraine, so it will continue to be a bit of a drag on the Euro in general. The market falling from here could open up the possibility of a move down to the 1.09 level, and then the 1.08 level. If we break down below the 1.08 level, the market could then go looking towards the 1.05 level. Regardless, we are most certainly in a downtrend and there is no reason to try to fight it.
I believe that simply being patient enough to find “cheap dollars” will be the way going forward, as there are a lot of concerns when it comes to the EU, and of course, there is a lot of space between the interest rates of the two currencies. The interest rate differential has a lot to do with how currency pairs move, and that of course is going to continue to be one of the biggest influences in this pair. Furthermore, we have a situation where the overall momentum of the market continues to see downward pressure anyway. In fact, it is not until we break above the 1.12 level that I would consider buying this market.
[ad_2]