EUR/USD Forecast – Sell the Rallies: Friday’s Close Below $1.0700 a Significant Bearish Sign – 13 February 2023
When you look at the longer-term chart, the previous weekly candlestick was a nasty shooting star right at the 50% Fibonacci level, and now it looks like we have a bit of follow-through.
When you look at the longer-term chart, the previous weekly candlestick was a nasty shooting star right at the 50% Fibonacci level, and now it looks like we have a bit of follow-through. In that scenario, it does make a lot of sense that we would see a bit of a pushback, but now it appears that people are finally starting to pay close attention to the idea of the Federal Reserve staying tight for longer, and therefore it will continue to drive the value of the US dollar higher in general.
With that being the case, I have a proclivity to short this market, but a short-term rally that shows signs of exhaustion will be a shorting signal from what I can see. The 1.10 level above has been a massive barrier, and I think it will continue to be. Because of this, I think we’ve got a situation where we continue to see downward pressure as the standard, but if we were to break above the 1.10 level, then it’s very likely that we could then see the Euro really start to take.
On the other hand, if we take out the 200-Day EMA underneath, then I believe that the Euro could go all the way down to the parity level. That is a rather significant move, but quite frankly we have seen so much in the way of noise in the financial markets over the last year that it would not be surprising at all. The market will continue to be very choppy, so keep your position size reasonable but recognize that there could be a lot of volatility that you need to deal with. I do believe that it is probably only a matter of time before we drop.
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