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Christopher Lewis

The Euro has rallied a bit during the trading session on Monday again, but still faces significant headwinds near the 1.19 level. As you can see of the last couple of sessions, every time this market has gotten close to that level it has sold off. In fact, it seems as if there is a bit of a barrier there that the buyers simply cannot get past. Having said that, we are still in an uptrend, so I think what we are looking at is a scenario where we simply fade the rally in the short term. It is not until we break above the 1.20 level that I believe this market is a “buy-and-hold” scenario.

EUR/USD Video 15.09.20

To the downside, I believe there is a significant amount of support near the 1.17 handle, so think that might be the bottom of the market currently. Do not get me wrong, I am not saying we can’t break down below there, but I also recognize that we have not only seen significant support, but we also have the 50 day EMA sitting in that same area. In fact, I believe that is what we are looking at currently, the market is going to chop back and forth as we decide whether or not the US dollar is going to weaken over the longer term. There are arguments for both sides of the equation, so I would anticipate a lot of choppy behavior and therefore in decision. Short-term back-and-forth trading probably continues to be the best way to approach this market, but it is clear that we have a massive amount of resistance above the traders simply cannot get past.

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

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