As far as buying is concerned, I just don’t have the setup as the fundamentals don’t warrant that type of trade.
The Euro broke below the parity level during the trading session on Thursday, as we continue to see a lot of US dollar strength. Because of this, it shows just how precarious the situation is for the Euro, and therefore it’s likely that we will see plenty of sellers every time this market rallies. After all, the session on Thursday was just the latest shot across the bow when it comes to the Euro, which is going to continue to struggle.
If we were to break down below the bottom of the candlestick for the trading session on Thursday, that could open up even more selling. That being said, the market is a little oversold at the moment, so we may need to go sideways for a while. We could get a little bit of a “fair market bounce”, but I would not look at this as a potential buying opportunity, far from it. After all, this is a market that will continue to look at the European Union through the prism of not being able to provide its own energy, and of course through the prism of the economy standing still. While there is some inflation in Germany, the reality is that growth is going to be all but dead going forward.
The markets will continue to be very noisy, as the Federal Reserve’s tightening of its monetary policy continues and people run toward the greenback. That being said, we could get a short-term bounce to the 1.04 level, with a 1.02 level between here and there offering resistance as well. I would short this market at either one of those levels if we continue to see a bounce followed by exhaustion yet again. Ultimately, this is a market that is “paid the rally” from what I can see, and I just don’t have an idea that this is going to change anytime soon. Ultimately, I think that we eventually break down and go to the 0.98 level, but it’s going to take some work to get there. After all, breaking through the parity level is a huge psychological victory for the greenback, but there’s really nothing to suggest that we cannot do it for a bigger move. As far as buying is concerned, I just don’t have the setup as the fundamentals don’t warrant that type of trade. Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers to choose from.