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Christopher Lewis

The Euro has initially tried to rally during the trading session on Monday but found the 1.18 level to be a bit too much, and then pulled back towards the 1.17 level. This is an area that will probably cause some support, but quite frankly it still a bit elevated. I think at this point we need to see the Euro consolidate a bit if nothing else.

EUR/USD Video 04.08.20

That being said, I do not like the idea of shorting this pair regardless. Even if we break down below the 1.17 level, it is very likely that we will find plenty of buyers underneath. In fact, I think there is a lot of support all the way down to the 1.15 level, so I am hoping to see a little bit more of a deeper correction and then take advantage of it.

To the upside I believe that we are going to go looking towards the 1.20 level eventually, but quite frankly I do not think that we get there overnight. This is a market that has been overbought for some time, so I think the healthiest thing we can do is either consolidate or pull back. After all, markets cannot go in one direction forever, despite the fact that they often tried to. I believe that the 1.15 level is now the “floor” in the market, and therefore I have no interest in shorting until we get well below that important figure.

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

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