The Euro rallied a bit during the Friday session, which makes quite a bit of sense considering that the weekend is coming, and quite frankly most people who have shorted the Euro against the US dollar have made quite a bit. Now that the Euro has broken major support, it’s more than likely being patient will be the best way to trade this market.
The Euro has rallied a bit during the trading session on Friday, in a bit of short covering. After all, the weekend is coming in most people will be more than happy with over 100 point gain in shorting the Euro of all currencies. This is a pair that doesn’t typically move that well, so the fact that we have made such a significant drop shows just how volatile it is. If the market does rally from here, it’s very likely that the market will run into a lot of issues at the 1.09 level. Furthermore, the 1.10 level should also be resistance. I’m looking for a simple sign of exhaustion after a rally to take advantage of.
When you look at the longer-term chart, the 1.0750 level underneath offers quite a bit of interest due to the fact that there was a gap on longer-term charts that have yet to be feel. At this point, I think that the market will get there but it won’t get there immediately. I like the idea of shorting signs of exhaustion as not only does the Euro have its own issues, the US dollar represents the US economy, which of course is without a doubt the strongest one out there. That being said, we are oversold so this bounce makes quite a bit of sense, especially considering that the weekend is coming in the last thing people want to do is wake up on Monday to a major gap against them.
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Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.