The US dollar continues to see a lot of noise, but in the early Thursday session, it looks as if the US dollar is trying to fight back against the selling pressure that has been so prevalent for the last several weeks.
The euro initially did try to rally a bit during the trading session here on Thursday but then turned around to show signs of hesitation as the markets continue to try to sort out what the Federal Reserve may or may not do. With this being the case, I do pay special attention to this area around 1.16 because if we break down below there, that could be the beginning of something.
Anything below 1.15 and I probably get short yet again. If we break above current trading at the moment, then we might go looking to the 1.18 level. With that, I think you have to look at this as a market that is in a state of flux at the moment. And as a result, we are just simply hanging around trying to determine where to go next. Keep in mind also that volume is a little light this time of year.
The US dollar continues to find the 50 day EMA as a bit of support, as the 148 yen level seems to be significantly resistant. So having said that, this is a market that I think is trying to sort itself out and determine whether or not it can break higher. I do believe it does eventually. The interest rate differential favors the United States dollar and of course, despite the fact that the market wants the Federal Reserve to cut rates, it doesn’t necessarily mean they’re going to. It’s a bit of a question at this point. And even if they did, the interest rate differential still is a mile wide.
The Australian dollar tried to rally during the early part of the session but has found that familiar 0.6550 level as a bit of a barrier. Because of this, we have pulled back quite a bit, and it looks like we may be getting ready to try to roll over again. We’re right about where the previous trend line would have been drawn. So, there are a lot of things going on at the same time as far as trouble, but I do believe that giving the way that this market has acted over the last couple of months, something hasn’t been quite right with the Aussie dollar anyway. So, I am looking to fade and perhaps try to short this pair if we drop just a bit further.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.