The Euro has rallied a bit during the course of the trading session on Thursday to reach towards the crucial 1.1850 level, an area that of course has mattered multiple times. Whether or not we can break above there is a completely different question, and you could make a huge argument about the US dollar being oversold at this point. However, we have the jobs number coming out and that will make a move happen. Ultimately, if we can break above here then the next target would be the 200 day EMA, and of course breaking above there would be a huge turnaround for this market.
EUR/USD Video 03.09.21
I would wait until we break down below the Thursday candlestick on a close in order to start selling, because quite frankly we are at that inflection point that could cause quite a bit of trouble. At that point in time, it would probably sell off quite drastically and go looking towards the that being said, the ECB has recently made a few comments about possibly tightening, and that of course is good for the currency as everybody was betting on the Federal Reserve tapering and the ECB simply sitting in quantitative easing forever.
Nonetheless, we are starting to see a lot of noisy trading down here, which is the bottom of the overall range that the market has been in for what seems like ages now. If this is what could be thought of as a “broadening bottom”, then that is a bullish pattern. However, the one thing that it does guarantee is that the volatility will continue in this pair. There is a lot of noise between here and the 200 day EMA though, so I think headaches are probably what you can count on.
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