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Christopher Lewis

The Euro rallied initially during the trading session on Thursday, but gave back the gains after the jobs number came out much better than anticipated with an addition of over 4 million jobs, this shows that the US economy is much more resilient than people thought and perhaps the fiscal stimulus may not have as much of a “slam dunk” mentality to it in the United States as previously thought. After all, it is an election year and people will have to justify what they do in Congress. If there is going to be less calls for fiscal stimulus, it is likely that the greenback could pick up a little bit of a bid as the ECB is most certainly going to continue flooding the European Union with Euros.

EUR/USD Video 03.07.20

That being said, we have been grinding lower for a while and although it does somewhat look like a flag, the angle of the flag itself is not particularly conducive to fulfill that pattern. With that in mind, I believe that we are simply going to grind lower for a while, trying to get back down towards the 50 day EMA, and then eventually the 200 day EMA which is currently sitting at roughly 1.1050. I am not looking for some type of meltdown, just that I think we continue to see money flow back into the US dollar given enough time. With this, I continue to fade short-term rallies, but I also recognize that we have seen a lot of choppy behavior in the interim, so you need to be overly cautious.

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

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