(MENAFN- Daily Forex)

• It looks like we are going to see yet another situation like we have seen over the last several days where the Euro gets sold off pretty early. But when the Americans show up, the United States dollar starts to shrink. And I think that is part of what's going on here. American traders are just simply selling the US dollar.
• That being said, the 1.16 level continues to offer support. And if we were to break down below that level, I think you've got a situation where we could really start to break down at that point, the market could drop to the 1.14 level, which of course is right about where the 200 day EMA is currently hanging around.

US Dollar Was Supposed to Collapse.

Remember, we were told that the US dollar was going to lose its world's reserve currency status and that it was going basically to zero. And just about any time you start hearing talk like that, you've hit the bottom. I don't know if the US dollar has bottom yet, but it's definitely in the process of making that argument. The circled candlestick is from the FOMC press conference and that clearly did not weaken the US dollar. We are seeing gold shoot straight up in the air and seeing people talk about de-dollarization because of gold, but both are strengthening. The 1980s had both strengthening, so it doesn't necessarily mean anything at this point in time. If we were to rally from here, the 1.18 level will offer significant resistance, and that's assuming that we can even get there, because we've tried multiple times over the last two weeks and just haven't been able to do that. So, with that being said, I think you've got a situation where you're fading rallies at the first signs of exhaustion still.

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