There is a lot of volatility just waiting to happen, and I do not necessarily like the idea of the European Union being stronger at this point, because it’s ridiculous to think that anything is changed.
The 50-Day EMA continues to be an indicator that a lot of people will pay close attention to, and therefore it’s probably worth noting that it is sitting at the bottom of the candlestick for the trading session. If we were to break down below there, then it’s likely that the market could drop down to the 0.9750 level. There is a lot of volatility just waiting to happen, and I do not necessarily like the idea of the European Union being stronger at this point, because it’s ridiculous to think that anything is changed. The market will do whatever the market will do, and you must deal with the market you are dealt.
The market breaking above the 1.01 level could be an opportunity to open the possibility of the 1.02 level, perhaps even the 200-Day EMA. I don’t think that’s going to be very easy, but it’s more likely than not going to be a scenario where we will eventually get some type of shock to the system that has everybody running towards the US dollar. Pay close attention to interest rates, because they will have their part to play as well, especially as there is so much fear out there.
There are plenty of potential mines that people will have to walk through this week, so I suspect it is only a matter of time before we get the right exhaustion candle to start shorting. When we do, I have no hesitation whatsoever to short the Euro, it’s going to be a very difficult winter for that part of the world, especially as Germany has “100% reserves of natural gas”, which accounts for roughly 20% of what it needs.
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