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Christopher Lewis

The Euro has rallied quite significantly during the trading session on Tuesday, breaking the back of a couple of inverted hammer’s. This of course is a very bullish sign but at the end of the day the question is whether or not it’s the real deal. I doubt it is in the short term, but the Federal Reserve going “all in” in order to save the economy of course should drive down the value of the US dollar over the longer term. In other words, I would fully anticipate some type of pullback in order to start buying, assuming that we get the proper price action. Unfortunately, the European Union is so weak from a structural standpoint that this won’t necessarily be the easiest long position to take on.

EUR/USD Video 25.03.20

If we do rally significantly though, we could get his high as the 1.10 level. That’s an area that should offer a certain amount of psychological and structural resistance. A pullback from that level of course would be a nice selling opportunity but if we were to close above that level then we probably go all the way to the 1.12 level above, followed by the 1.15 handle if we get some type of “melt up.” I wouldn’t hold my breath for that, but it is of course some type of possibilities so therefore we need to keep that on the table. I do favor selling rallies, but only after the appropriate signs of exhaustion. I believe we will get that opportunity in the next couple of days.

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