Looking at the Euro/US dollar pair over the last several weeks, you can see that we initially fell but then found plenty of support near the 1.12 level. That’s an area that of course is a major round figure that will attract a lot of attention, and furthermore you will see the 61.8% Fibonacci retracement level from the absolute lows, the rally, and then the pull back. That being said, a lot of value hunters will come back into the marketplace to pick up “cheap euros.”
Ultimately, we have been in a range for some time and we finally have seen an explosive move to the upside that can be believed. After all, we have had several starts and stops when it comes to buyers coming back into this market, but you can also see that we have also done something very interesting during the trading session on Friday, breaking above the 50 day EMA. By doing so, it shows real momentum shifting as both the 50 day EMA and the 200 day EMA have both been drifting lower.
Pulling back from here would make a little bit of sense, but the hammer from the Wednesday session should offer plenty of support which is basically just below the 1.1250 level. I believe in buying dips going forward, because quite frankly we had another catalyst during the day as well, Jerome Powell suggesting that the Federal Reserve had its interest rate set at the appropriate level. In other words, it was just more confirmation that the US dollar should remain somewhat soft, and although the European Central Bank is just as dovish, we are oversold looking at the longer-term charts. We are also oversold looking at the consolidation area that we have been in that is marked on the chart. In other words, there’s more risk to the upside then down, and I think that’s the only thing worth mentioning on this chart. Above, the 1.1450 level began significant resistance to the 1.15 handle, and it looks as if we are trying to get to that area.
Ultimately, we have been in a range for some time and we finally have seen an explosive move to the upside that can be believed. After all, we have had several starts and stops when it comes to buyers coming back into this market, but you can also see that we have also done something very interesting during the trading session on Friday, breaking above the 50 day EMA. By doing so, it shows real momentum shifting as both the 50 day EMA and the 200 day EMA have both been drifting lower.
Pulling back from here would make a little bit of sense, but the hammer from the Wednesday session should offer plenty of support which is basically just below the 1.1250 level. I believe in buying dips going forward, because quite frankly we had another catalyst during the day as well, Jerome Powell suggesting that the Federal Reserve had its interest rate set at the appropriate level. In other words, it was just more confirmation that the US dollar should remain somewhat soft, and although the European Central Bank is just as dovish, we are oversold looking at the longer-term charts. We are also oversold looking at the consolidation area that we have been in that is marked on the chart. In other words, there’s more risk to the upside then down, and I think that’s the only thing worth mentioning on this chart. Above, the 1.1450 level began significant resistance to the 1.15 handle, and it looks as if we are trying to get to that area.