The 50-Day EMA sits just below the 1.00 level and is rising. That would make a nice target, but if we were to break down below there it’s likely that we could go much lower.
With that being the case, it’s not a huge surprise to see the 1.0350 area offer resistance as it had offered support previously, and of course we have the 200-Day EMA sitting just above there that could offer a significant amount of resistance. If we were to break above there, then it’s possible that the market could go to the 1.06 level next. However, at the first signs of exhaustion, I think it’s likely that we will continue to see plenty of sellers. The 1.01 level underneath is likely to continue to be a significant area that’s worth paying close attention to.
The 50-Day EMA sits just below the 1.00 level and is rising. That would make a nice target, but if we were to break down below there it’s likely that we could go much lower. Either way, it’s probably worth noting that we are between the 50-Day EMA and the 200-Day EMA, which typically determines longer-term trends, depending on which direction we break out. Ultimately, I think we’ve got a scenario where you can see a lot of volatility in this area, so be careful with what her position sizes, are because markets can be out of control much longer than you believe.
After all, there’s no real reason for the Euro to be rallying, yet here we are. At this point, if we break above the 200-Day EMA rather significantly, then you must start looking at the potential of a bigger and longer-term correction. I am more than willing to start selling at the first signs of exhaustion in a market that quite frankly still has to look at the European Union with disdain.
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