- The Euro has fallen a bit against the U.S. dollar during the trading session on Tuesday again, as we continue to see the U.S. dollar fight back.
- All things being equal, this is a market that is hanging just below the crucial 50-day EMA.
- Ultimately, this is a market that I think will continue to see a lot of support in this general vicinity near the 1.1550 level.
If we break down below there, then we could see the market dropping to the 1.14 level, with the 1.14 level being significantly supported and the 200-day EMA sitting there to provide a little bit of a floor. It is worth noting that the FOMC interest rate decision was the actual top. I think that flies in the face of what most people expected. And when the market does something that nobody's expecting, that means you need to pay attention to what is actually going on, not what is “supposed to happen.”
Money Flowing into Bonds
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For what it's worth, we are starting to see money flow into bonds in the United States, and that drives the US dollar higher. That tells me, without really digging into the surface too much, that foreign buyers are out there picking up paper again. If that's the case, then you have a situation where traders need to buy US dollars in order to make that a trade that they can do.
So, with that being said, I think you've got a situation where we just continue to see more of a fade the rally type of scenario. And the exhaustion that we see from time to time is something that I plan on taking advantage of. I have no interest in buying this pair, at least not until we break above the 1.18 level, something I don’t expect to see anytime soon.
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