(MENAFN- Daily Forex)

• The euro has plunged a bit during the early hours here on Tuesday as the US dollar continues to strengthen. Quite frankly, the US dollar just won't roll over and die like everybody said it was going to do. And now we find ourselves at the uptrend line. The uptrend line, of course, has been in effect since the middle of April, so it matter at this point, and we are below the 50-day EMA. Now keep in mind that during the Monday session, we made this exact same move only to bounce and form a hammer.
• If we break down below this uptrend line, then I think we've got a shot at running to the 1.16 level. The 1.16 level being broken to the downside opens up quite a bit of selling pressure, perhaps down to the 1.14 area where I would anticipate seeing the 200 day EMA come in and offer some noise. All things being equal.

The FOMC Peak

Pay attention to this peak that we made during the FOMC press conference because that was it. And it's been miserable since. So, I definitely think that the Euro has some major problems. Quite frankly, the United States dollar was supposed to sell off after that meeting and yet it didn't. So a lot of times it doesn't come down to what the pundits are telling you. Listen to what the market's telling you. The market's telling you that at the very least the US dollar is not going to disappear, as some of the more hyperbolic traders out there had suggested. It's generally when you hear talk about losing the world's reserve currency status and how everybody is running from the dollar that you've seen the bottom or you're getting close to it. We started hearing a lot of that talk back in middle of June and here we are basically at the same level. So, for a currency that's dying, it's not doing much dying. I think we're on the precipice of something big. However, if we were to break above the 1.18 level, then maybe we get some confirmation of the uptrend. But I think there's enough risk aversion out there right now to make the US dollar perhaps a little bit more attractive than people had thought.

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