- The Euro at least attempted to go a little bit higher in the early part of the trading session here on Thursday, but has since fallen pretty significantly as we continue to see a lot of volatility in markets.
- With the PPI numbers coming out much hotter than anticipated in the United States, traders are starting to worry that perhaps the Federal Reserve won’t be able to cut rates as quickly as they once thought.
- What I find interesting here is the Euro has formed a bit of a double top at 1.18 and we’ve had a nice bounce, but now it looks like we’re trying to roll over again.
If we break down below the 50 day EMA, then that could send the Euro even lower, perhaps back down, and to the 1.14 level and anything below there, think could call the top.
Questions for the Fed
I think there are a lot of questions out there as to what the federal reserve can do going forward. And one of the federal reserve governors came out today and even suggested that the idea of a half point or a half percent rate cut was validated, was completely wrong by the data that the U S economy is currently producing. If that is the case, things could get rather ugly pretty quickly for the Euro because money will come right back towards the U S because the U S dollar has been so oversold.
Ultimately, this is what I’m waiting to see. I don’t want to buy the Euro. And if I did short the U S dollar, it won’t be against the Euro. At this point, we’re in a little bit of a holding pattern. We are consolidating in an area that I think we may need to make a decision from, but this chart just got quite a bit more interesting.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.