(MENAFN- Daily Forex)
- EUR/USD traders have tried to rally during the trading session on Thursday but as you can see, the market is likely to continue showing a lot of problems.
- Ultimately, the European Union is a bug looking for a windshield, and that windshield is approaching quite rapidly.
- In this scenario, I do believe that it is more likely than not going to be a situation where you are fading the very first signs of strength that you get.
- After all, the European Union must deal with the lack of energy this winter, and of course the uncertainty of the war in Ukraine.
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Beyond that, there's other issues that will have to be dealt with like food supply. It's somewhat astonishing to me how the market has not priced in more trouble. It could find itself on the wrong side of reality rather quickly if we don't pay attention to some of the serious problems brewing with the Europeans. The parity level above continues to offer major resistance , so I do think that it is probably only a matter of time before we see sellers in that general vicinity if we get down there.Euro Likely to be Under A lot of Pressure
The 50-Day EMA is just above there, and I think it will continue to offer a significant amount of resistance as well, so I just don't have any interest in trying to get long at this point. The market has been in a nice downtrend for ages, and there's no need to try to fight it. Yes, we may get the occasional rally, but only the idiots are coming in to try to pick the bottom. What they don't understand is that these trends are in place for a reason, despite what candlesticks may or may not tell you.
It's not until the Federal Reserve changes its overall attitude that I see any chance of a sustainable rally. We can rally several handles and it would not change much when you look at the long-term chart. The euro is going to be under extreme pressure all winter long, and it's not until the Federal Reserve says or does something to change the situation that the US dollar will give up its grip on not only the euro but multiple other currencies as well. Yes, it's overdone, but that just means you are fading rallies.
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