The Euro has rallied during the trading session on Thursday after the Federal Reserve has suggested that the central bank was going to come out and buy just about anything it could, including junk bonds. That being the case, the market is likely to continue punishing the US dollar, but at the same time the European Union is an absolute mess financially. Because of this, the market is likely to continue to see Euro weakness in general. The 1.10 level above is massive resistance, so I don’t think that the pair get above there. When we get closer to the 1.10 level I going to be selling on signs of weakness.
EUR/USD Video 10.04.20
To the downside, I see the 1.08 level as support, and the 1.06 level as the same. This pair will continue to chop around, thereby been very difficult to trade unless you can trade small or perhaps trade short-term charts. I favor the downside in this pair, despite the fact that the Federal Reserve is flooding the market with dollars. This will probably cause a short-term pop to the upside, but I suspect it will also be short-lived.
You can use this as a proxy for the US Dollar Index if your broker doesn’t offer it, because it is a major component to that indicator. Simply put, I use this chart as a gauge of US dollar strength or weakness in other trades, especially when it comes to emerging market currencies. For example, you can do something like use this chart to discern whether the US dollar is showing strength or weakness, and translate that against the Hungarian forint, Mexican peso, South African Rand, and so on.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Crude Oil Price Update – Sellers Stop Rally at $27.99 – $30.04 Retracement Zone
- Silver Price Daily Forecast – Silver Continues Its Upside Move
- USD/JPY Price Forecast – US Dollar Quiet Against Japanese Yen
- U.S. Dollar Index (DX) Futures Technical Analysis – 99.245 – 98.130 Controls Near-Term Direction
- Gold Price Forecast – Gold Markets Rally Towards Highs Again
- E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Set Up for Bearish Closing Price Reversal Top