EUR/USD Forecast Today 05/02: Relief Rally (Video)

(MENAFN- Daily Forex)

• The Euro has shown itself to be a little resilient here over the last couple of days as traders have bought into it, or perhaps I should say covered their short positions with this market being so overextended.
• That being said, everybody's excited about the idea of trade tariffs not coming, but trump did mention the European Union and he has had no conversations with them whatsoever.
• Tariffs are probably on the table for the European Union still, and therefore I wouldn't get overly excited if I were you.

Furthermore, there is also the very real possibility that this is just a dead cat bounce. This is a market that's been falling apart for some time. Now, inevitably you would have short sellers collecting profit. Somewhere between here and 1.05, I'm looking for signs of exhaustion that I can start selling again. There are some events that could get this going.

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The first of which comes to mind is the jobs number on Friday, but there's also services PMI and a couple of other things going on in America that could cause this to happen, or Donald Trump could just send out a message that he's thinking about slapping the Europeans with a 25% tariff. We've already seen how quickly that can happen.

At this point in time, the man is on a mission and part of that will be to open up the European markets just as he's trying to open up the Canadian and Mexican markets as well as close the borders, ironically, at the same time. But Europe is definitely not a place that he's afraid to threaten. He's had issues with the Europeans more than once in his past administration, but this time around, he seems much quicker to pull the trigger. So, with that being said, I'm looking for an opportunity to short this market. I don't see it yet, but the closer we get to the 1.05 level, the more likely I will.

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