We still must solve the entire energy issue this winter, and therefore I think we still have a high likelihood of a lot of financial support coming our way.
On the other side of the equation, you have the European Union, which is a basket case. We still must solve the entire energy issue this winter, and therefore I think we still have a high likelihood of a lot of financial support coming our way. The market breaking above the 1.01 level is very strong, but there is a significant amount of noise between here and the 1.04 level, not to mention the fact that the 200-Day EMA sits there as well. Because of this, I think it’s probably only a matter of time before the sellers come back.
I will be paying close attention to how this market behaves at the end of the day on Friday because whether people are willing to hold the currency through the weekend can tell you a lot about what they believe. If we end up having a very strong candlestick for the Friday session, then it’s likely that the rally has further legs. On the other hand, if we see the market role over again, it tells you that this was a sucker’s rally and a bull trap.
Underneath, the 50-Day EMA offers temporary support, but if we were to break down below there, then it’s likely that the market could go down to the 0.96 level. We have been in a downtrend for quite some time, and even though we’ve had a very strong couple of candlesticks in a row, we are still very bearish looking from the longer term. All things being equal, this is a chart that you should be watching to get the dollar right because it’ll give you a bit of a “heads up” as to how to trade other markets.
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