- The euro experienced a slight decline against the US dollar on Thursday, amid ongoing selling pressure.
- However, it did manage a minor rebound later, indicating some underlying support.
- This 1.15 level remains critical, and it seems likely that the market could bounce back from here.
- Yet, if it breaks below 1.15, it might drop to around 1.14, where the 200-day EMA is positioned.
short rally
A brief uptick seems feasible since the 50-day EMA acts as a short-term barrier. There’s also a downtrend line in the mix, which might serve as a temporary ceiling. If it manages to break through, the next targets could be 1.17 and then 1.18.
Currently, the interest rate differential favors the US dollar, a trend likely to persist for a while. Just as we’ve noticed since the September FOMC meeting, I prefer to observe short-term gains, signaling potential fading momentum.
Looking to the long term, if prices fall below 1.14, we could see them drop to 1.11, which is a target I have in mind. Being situated between the upper 50-day EMA and lower 200-day EMA, the market is expected to experience considerable volatility. Overall, it feels like we’re caught in a larger pattern, but there are genuine concerns that the Fed may not reduce rates as swiftly as the market anticipated, especially with a weak jobs report hanging over things.
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Christopher Lewis has been trading foreign exchange for over 20 years and has contributed regularly to various online platforms, including FX Empire and Investing.com. He employs technical analysis for trade opportunities and focuses on longer-term positions, often holding trades for several days or weeks.
