While the euro
has fallen a bit against the yen and the pound today, the dollar's weakness has limited the downside risk in EURUSD
. If the dollar ends up rebounding following May's US retail sales data on Thursday, we may very well see the euro
fall back to $1.12 or even below given the long term trend line
that's currently being tested (it comes in at around $1.137$). This is something that we should all be following tomorrow. If the dollar continues to fall, however, don't expect EURUSD
to provide a new short opportunity as the trend line
resistance would probably break. $1.15 would likely be reached once $1.14 gave way.
I'll be updating this idea tomorrow based on how the market moves following the US retail sales data.