The Euro has struggled a bit during the trading session after the jobs number came out of the United States exactly as expected, adding 164,000 jobs. With that, it looks as if the 1.11 level is going to continue to offer resistance, as it was previous support. At this point, the market looks very likely to see more negative pressure as the Euro slammed into that area but then only turned around to show signs of weakness shortly thereafter.
We did form a hammer during the trading session on Thursday though, so I think what this means is that we are going to see a bit of a grind lower, perhaps the occasional short-term rally but it does look very likely that we are going to go to the downside and perhaps reaching even below the 1.10 level. In fact, we are below the 61.8% Fibonacci retracement level, and that typically means that we will go to the 100% Fibonacci retracement level. That is, believe it or not, the 1.05 EUR level.
Although the Federal Reserve has recently cut rates, it doesn’t necessarily sound like they are ready to start a rate cutting cycle. This is in sharp contrast to the weakness that we have seen in the European Union, and it does seem that people are using the US dollar as a safety currency again, as treasury markets have heated up. With all of that in mind, the downtrend does make sense as long as we can stay below the 1.12 handle, which is a significant level of both support and resistance recently. Selling rallies should continue to work, but keep in mind this pair does tend to be one of the choppiness Forex pairs in the world. It’s very much a grinder, but it certainly seems as if it is a negative grinder.
We did form a hammer during the trading session on Thursday though, so I think what this means is that we are going to see a bit of a grind lower, perhaps the occasional short-term rally but it does look very likely that we are going to go to the downside and perhaps reaching even below the 1.10 level. In fact, we are below the 61.8% Fibonacci retracement level, and that typically means that we will go to the 100% Fibonacci retracement level. That is, believe it or not, the 1.05 EUR level.
Although the Federal Reserve has recently cut rates, it doesn’t necessarily sound like they are ready to start a rate cutting cycle. This is in sharp contrast to the weakness that we have seen in the European Union, and it does seem that people are using the US dollar as a safety currency again, as treasury markets have heated up. With all of that in mind, the downtrend does make sense as long as we can stay below the 1.12 handle, which is a significant level of both support and resistance recently. Selling rallies should continue to work, but keep in mind this pair does tend to be one of the choppiness Forex pairs in the world. It’s very much a grinder, but it certainly seems as if it is a negative grinder.