Euro bounces significantly from major level on Wednesday

The Euro has bounced significantly during the trading session on Wednesday, as one would expect. When you approach a level like 1.15 that is not only psychologically important but also structurally important on longer-term charts, it makes sense that you get a significant move. However, that’s not reason enough to start buying. Because unfortunately there is still going to be a lot of noise coming out of the European Union, in the form of Italy. While there has been a bit of a reprieve as of late, and there have been signs of perhaps an attempt to fix things as far as forming a government, that still eludes politicians. Even if it didn’t, there still a lot of concerns when it comes to debt.

I believe that this is a bit of a “dead cat bounce”, meaning that eventually the sellers will come back. The question then becomes when will they show up? I think that rallying 130 pips in short order makes sense when looked upon in the longer-term charts, but at the end of the day I suspect that we are going to see exhaustion rather soon, and another attempt at the psychologically important 1.15 level. If that level gets broken to the downside, that could be very negative for the Euro longer-term, and I think it’s a very real possibility after the amount of bearish pressure and quite frankly nastiness we have seen in this market. Contrast all of these issues with rising interest rates in the United States, you conceive quite clearly why this market continues to fall.

Euro to Dollar Forecast Video 31.05.18