- The euro has initially tried to rally a bit during the trading session on Tuesday, only to turn around and show signs of negativity.
- That being said, we felt rather drastically, only to see a weaker than expected Manufacturing PMI number in the United States suggesting that perhaps the US economy is starting to slow down a bit.
- If that is going to be the case, then it makes quite a bit of sense that we would see traders bet on the idea that the Federal Reserve might have to get a little bit looser with monetary policy.
- Whether or not that’s actually true remains to be seen, but it is the thought process that a lot of people are contemplating.
Uptrend Still Here
The euro is still technically in an uptrend, as we launched straight up in the air a few weeks ago, and despite the fact that we have been somewhat quiet recently, the reality is that we have pulled back just a bit, but we have also seen quite stable trading, that’s actually a good sign for the uptrend to continue given enough time, so we will have to wait and see how that plays out. Ultimately, this is a situation where we will have to pay close attention to whether or not momentum picks up, because the momentum is the one thing that will really get this thing going. As things stand right now, there just isn’t a lot going on, although risk is most certainly skewed to the upside.
A short-term pullback at this point in time could send this market looking to the 200 Day EMA, just below the 1.07 level. If we were to pull back to that area, technical traders would more likely than not look at the 200 Day EMA in order to try to find some type of technical support. Whether or not it would get it remains to be seen, but I recognize that it’s more likely than not that we would find buyers jumping in between here and there.
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