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Christopher Lewis

EUR/USD Video 05.06.20

The Euro tried to break out during the trading session on Thursday, as the ECB added a ton of liquidity into the system. While normally bad for a currency, the initial reaction was very bullish. Since then, the markets have calmed down a bit and it looks as if the 1.1250 level is going to continue to offer a bit of a barrier. With that in mind, I do think that if we break down below the lows of the Thursday session, we can begin the correction that is so desperately needed in this market.

At this point, only fools are buying after a move like this. Yes, it can extend it but that only adds more fuel to the fire when we pullback. If you wanted to get long of this market, you need to do it after a significant pullback so that we can gain the necessary momentum to do that.

If we do break out to the upside, the 1.15 level could be a target but that is going to be even more of an ugly area. Take a look at the last time we got up there, it is highly likely something like that could happen again if they do in fact try to make that happen. Huge amounts of stimulus typically are good for currency, and while I recognize that the Federal Reserve is out of control, the fact that traders thought this was going to be a good thing suggests just how skewed the market is right now.

For a look at all of today’s economic events, check out our economic calendar.

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