The euro rallied slightly ahead of the start of the trading session on Thursday, but continues to meet higher resistance. In this case, the market looks like it will be under pressure from sellers again, as we have been in a downtrend for several months. That being said, there are many questions about where the US dollar will go next, and of course interest rates in America will have a huge impact on where we end up.
EUR / USD Video 09.04.21
At the same time, most retail traders ignored the fact that the ECB jumped into the bond market and started buying in the first place. This lowers rates in the European Union, so it still supports the dollar in terms of yields. Because of this, I would not be surprised at all if this market hits the 1.16 level again, and so I am looking for selling opportunities. The 1.16 level has been a huge support in the past and should be in the future. I believe there is a roughly 100-point support zone between the 1.16 and 1.15 levels, so I think of this more or less as a “market bottom”.
If we broke below the 1.15 handle, it’s hard to tell where it would end, but it will definitely be a few handles below. In the short term, I think it makes sense to get that pullback and then maybe move back and forth. If we were to break above the 50-day EMA, then I think the market is likely to chase the 1.20 level above.
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