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MENAFN- Daily Forex)
- During the trading session on Thursday, we've seen the US dollar dropped significantly against the Swiss franc, as we continue to threaten the crucial 0.90 level.
- This is an area that's been important multiple times in the past, and I think we will have to watch very closely as to how the US dollar behaves here.
- If it can bounce, then it shows a lot of resiliency, but if we were to break down below here, then it suggests that the US dollar might we can even further.
The inverse currency pair, the EUR/USD pair, is in a very similar situation with the 1.05 level. Remember, when you are trading one of these pairs, you are taking the opposite direction of the other one. The correlation is extraordinarily high, and something that you must be aware of. At this point in time, it certainly looks like we are trying to break down, and it is probably worth noting that the 0.92 level previously has been like a massive brick wall. Whether or not that ends up being the case yet again remains to be seen, but it certainly has held quite nicely for a while.
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What it is worth, the longer-term charts suggest that we are in the midst of a massive W pattern, so I think a lot of people will be paying close attention to whether or not we can continue to go higher. If we were to break down below the 200 Day EMA at the 0.89 level, then I think it calls off the entire W pattern, and I think we start plunging. This will be a sign that the US dollar is falling apart against everything, but right now we are still quite a bit different from making that happen.
EURUSD Chart by TradingView
If we were to turn around and take out the 0.9050 level, then I think that would be a good sign that the pair is ready to go much higher. In that environment, I would be a buyer and looking to get back to the 0.9150 level. At this point though, there's no real sign of a bounce quite yet. However, keep in mind that there are a lot of PMI numbers coming out during the session on Friday.
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