Euro Launches Much Higher

The Euro has launched much higher during the trading session on Wednesday as we continue to see a lot of volatility in the currency markets. That being said, the market was oversold so it is not a huge surprise to see that a bit of profit-taking is in order. That being said, the market is likely to see plenty of resistance above and I think if you take a bit of time, you could be a short seller at higher levels. In fact, that is how I am looking at this market, an opportunity to buy “cheap dollars.”

EUR/USD Video 10.03.22

Looking at the size of the candlestick, it is somewhat impressive, but at the end of the day when you look at the totality of the trend, not much has changed. Simply stepping out of the way for a couple of days should offer a nice setup, so that is exactly what I will be looking for. The 1.11 region is the beginning of the resistance, so we will have to wait and see whether or not we get that far.

As I record this, we are sitting at the 1.10 level which of course has a certain amount of psychology attached to it, but at this point, I have to assume that we are so oversold that we could bounce even higher. Ultimately, the 1.12 level above is going to be a significant barrier to overcome, so it is really not until we get above that area that you can even entertain the idea of buying Euros. Interest rate differential continues to favor the US dollar and of course, there are a whole host of other reasons to be concerned about Europe at the moment.

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