(MENAFN- Daily Forex)

• The euro initially rallied a bit during the trading session on Thursday to show signs of reaching the 50 day EMA before falling apart again.
• Falling apart is probably a strong word, but what I'm getting at is that euro just cannot hang on to strength.
• I think the session on Thursday is going to be another sign of that. The 1.16 level is an area that has been a bit of a magnet for price.

So, if we break down below there, then the 1.1550 level gets opened up for a move down to the 1.15 level, eventually the 1.14 level. Ultimately, I have no interest whatsoever in trying to look at this through the prism of what's going on with the US dollar.

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The US dollar is the currency you need to get correct to get most of Forex correct. And right now, it looks to me like the US dollar is hanging in there. It's not falling apart. Remember, they promised us that the US dollar was going to zero after the FOMC press conference. That was the high. Whether or not we can break above there remains to be seen, but what we can infer from this is the US dollar is not going to roll over and central banks out there cutting rates will continue to cause a bit of noise and the Federal Reserve is one of them.

EURUSD Chart by TradingView

But quite often what you will see is when the Federal Reserve starts cutting, the dollar strengthens because that means there's something nefarious afoot. And if that's the case, then people look to the treasury market for safety. By the way, people are buying treasuries again. So, I do think this is a situation where we need to watch the Euro closely because we might sooner or later start to talk about the trend change. We aren't there yet, but we did break down through a pretty obvious trend line.

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