The US dollar has broken down significantly over the last couple of sessions, and Thursday so more selling pressure. The market looks likely to continue to go towards the 100% Fibonacci retracement level, which is closer to the 107.50 level. While I certainly think that the negativity continues, I also recognize that we might be a bit oversold, and I certainly think that once we broke down below the 110 level, we were destined to wipe out the entire uptrend. I think that rallies at this point in time or to be looked at with suspicion, and I am more than willing to sell this pair on exhaustive candles after short-term rallies.
Although this pair tends to be reactive to the stock markets in general, I don’t think that’s the case now. I think this is more about the US dollar, and I think that we will continue to go much lower, but I also recognize that the 107.50 level should be rather important for support. In the meantime, I think we will get jumps back and forth, because obviously a market can’t move in one direction forever. If that’s the case, then I think that it is only a matter of time before we can get back into this market and start selling it yet again. If we were to break above the 110 level, then I feel that the market should continue to go higher. That seems to be very unlikely and the short-term though and would be a bit of a shock.
Written by FX Empire