The Euro has gone back and forth during trading on Tuesday as we have gotten a bit overdone. At this point it’s very likely that we are going to see a pullback, but I think at this point it’s very likely that the 1.1350 level underneath could be the beginning of serious support. Ultimately, if we break down below there I think there is even more support below that level. The fact that we have covered quite a bit of distance of the short-term chart suggests that we may be a bit overdone.
EUR/USD Forecast Video 26.06.19
You shouldn’t ignore the fact that we have broken above the 200 day EMA, that almost always attracts a lot of attention. Ultimately, larger and longer-term participants use that to determine the longer-term trend, and the fact that we have broken above it gives us an idea of where we should be trading, in this case to the long side. In fact, even if we pull back from here I’m curious to see whether or not it becomes a “higher low”, which is yet another reason to think that we are confirming a bottoming pattern.
With the Federal Reserve stepping to the sidelines and looking very likely to cut interest rates later this year, the Euro is now undervalued, and therefore we need to go higher over the longer-term. However, we can’t simply just jump in, because these trend changes tend to be very noisy, and more of a longer-term process. Think of it as trying to turn a huge boat around in the ocean. It doesn’t happen overnight, but once it gets going the momentum picks up quite nicely.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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