The Euro has initially pulled back during the trading session on Monday to kick off the week but also has turned around to show signs of resiliency again. By finding support near the 1.13 level, we then found ourselves closer to the 1.1350 level. This is a good sign, considering that we are so close to the 200 day EMA, and of course the fact that the 1.1350 level has offered significant support several days in a row, and we find ourselves attracted to that level yet again.
That being the case, the bottom of the Monday range will be crucial for support, but it does show that the buyers are most certainly interested in the Euro, or at the very least the US dollar is on its back foot as the Federal Reserve has suggested that interest rates are going to be cut. Yes, there was a little bit of a strengthening in the US dollar due to good news out of the G 20, but really it’s more or less a short-term phenomenon that we are seeing, as it is already starting to turn around. At this point, it looks as if traders still believe that the Federal Reserve is going to cut interest rates.
That being the case, it looks as if the 1.14 level will continue to offer minor resistance and at that point I think if we can clear that level will probably go looking towards the 1.15 level which of course is a large, round, psychologically significant figure, which always attracts a lot of attention. Beyond that it has been important in the past, so market memory will come back into play. If we were to turn on a break down, it’s very likely that the 50 day EMA underneath will be supported, creating a “higher low.”
That being the case, the bottom of the Monday range will be crucial for support, but it does show that the buyers are most certainly interested in the Euro, or at the very least the US dollar is on its back foot as the Federal Reserve has suggested that interest rates are going to be cut. Yes, there was a little bit of a strengthening in the US dollar due to good news out of the G 20, but really it’s more or less a short-term phenomenon that we are seeing, as it is already starting to turn around. At this point, it looks as if traders still believe that the Federal Reserve is going to cut interest rates.
That being the case, it looks as if the 1.14 level will continue to offer minor resistance and at that point I think if we can clear that level will probably go looking towards the 1.15 level which of course is a large, round, psychologically significant figure, which always attracts a lot of attention. Beyond that it has been important in the past, so market memory will come back into play. If we were to turn on a break down, it’s very likely that the 50 day EMA underneath will be supported, creating a “higher low.”