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MENAFN- Daily Forex)
The Euro has rallied a bit during the early hours on Wednesday as we have seen the United States dollar give back some of its gains. The US dollar was a little overbought. So, it's not a huge surprise to see that things are starting to shift in another direction.
That being said, I think you've got a scenario where the 1.05 level continues to be major support. The fact that the stochastic oscillator crossed in the oversold condition a few days ago probably has this EUR/USD
market ready for a technical bounce. Whether or not this sticks is a completely different question, but keep in mind that the 1.06 level above is going to be a bit of a barrier. I'll be watching that because if we can break above the 1.06 level, then we have further gains ahead.
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Short term pullbacks probably end up showing signs of support near the 1.05 level again. And anything below there I think probably has some issues. Fundamentally speaking, the United States came out with the PCE numbers on Wednesday exactly as expected, right along with preliminary GDP and weekly unemployment claims came within about 2000 jobs from expected numbers. So, with all of that being said, I think the market is probably seeing some short covering due to the Thanksgiving holiday as a lot of the major traders in New York at least won't be at their desk tomorrow for Thanksgiving. And then again on Friday, because most Americans take both days off if they can.
EURUSD Chart by TradingView
What will be interesting is to see how this pair behaves next week. I think anything above 1.0750 could change the trend again, but right now, this looks like a market where you will probably be fading signs of exhaustion after rallies. At this point, although the euro looks like it wants to rally, the reality is that the upside is probably still somewhat limited.
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