• You can see that the Euro has had a very big day during Friday as Trump has blathered in the news that he wants Chairman Powell to start cutting rates immediately.
• Oddly enough, Trump doesn't make that decision, and it seems like the markets have forgotten about that, at least in the short term.
• So, at this point in time, I think we've got a situation where we have to determine whether or not there is enough momentum to make this market go higher.

I really don't believe this until we break above 1.06, because that would be a real recovery. Right now, when you look at the overall drop that we have seen, we are still not even to the 38.2% Fibonacci retracement level.
 

We Will See…

So really with that being the case, I think this is a little bit of an oversold bounce and I will be selling into this unless of course, we break above the 1.06 level, then I'll have to reassess things. The Euro is going to continue to suffer at the hands of the European economy and bureaucrats. That's just the reality of the situation and I think ultimately, you've got a scenario where eventually people go looking for cheap US dollars again, and they may be finding them in the cluster just above current trading. Again, I'm looking for signs of exhaustion to sell into. I recognize that this is a nice little bounce, but it doesn't really change the trend, at least not quite yet.

(Click on image to enlarge)

At this juncture, the market is likely to continue to be noisy, but if we can get some type of negativity, then it’s likely that the momentum could come unraveled for the Euro, and then we would see money running right back into the United States, as I expect to be the case of the longer-term anyway.

More By This Author: