Is the euro / dollar rate recovering or are we just approaching the end of the pullback?
The euro turned slightly above the shooting star from the previous session on Wednesday as it continues to see massive inflows. That being said, we are currently testing the 50-day EMA and the previous uptrend line from below. This usually means there may be some noise and we are also close to the main selling point. Now the question is, are we recovering or are we just heading towards the end of the retracement?
The candle is somewhat impressive, but with the 50-day EMA just above and this trendline appearing in the same place, the question now is whether the market is okay above the 1.19 handle. There is a lot of congestion in the market in this area and so I think it is only natural that we will see small swings. Whether we can continue to climb higher may be an entirely different question, probably based more or less on the idea of what yields are going in the United States. After all, both the ECB and the Federal Reserve are buying bonds as quickly as possible, so this is essentially a race to devalue the currency.
If we break above the 50-day EMA and perhaps more importantly the 1.20 handle, then the market is likely to move towards the 1.22 handle. The 1.22 handle is of course a major handicap for people as we have sold quite a bit in thisbut. In other words, no matter what happens next, I think the only thing you can count on is a lot of buzz in the market, but this is nothing new for this pair. Because of this, I think we could very well see some reason for this market crash, and once we do crash, I think it is likely that we will turn to the 1.16 level below, which was a massive support level. … It hasn’t been tested yet this time, so you might think there are people trying to get there. This does not mean that we get there quickly, because this pair almost never moves fast.