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Christopher Lewis

The Euro has rallied a little bit during the trading session on Wednesday but looks a bit more sluggish than it has over the last couple of days. This should not be a huge surprise, because quite frankly we got a little bit ahead of ourselves. Whether or not we sell off from here is a completely different question, it will probably be based upon what goes on with yields in America. As I write this, yields are dropping slightly so that should help the Euro stays somewhat levitated.

EUR/USD Video 08.04.21

Just above, we have the 50 day EMA so that could come into play as resistance, just as we have the 200 day EMA at the crucial 1.1830 level that we sliced through during the Tuesday session. All things been equal, this is a market that I think needs to correct just a bit, but what my real question is as we approach the 1.1830 level, what happens next? I think that is what I will be looking at more than anything else, but again if those 10 year yields start to reach towards 1.17, I will become aggressively short of this pair. If we break above the 50 day EMA, then I believe that this market goes looking towards the 1.20 level above, which of course is a large, round, psychologically significant figure that will attract quite a bit of attention. To the downside, I still believe that the market could go looking towards 1.16 level after this correction if we do in fact see yields in America start to pick back up.

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