Going to skip TF and Oil today. This because TF hasn’t broken resistance but isn’t exactly reversing trend either; building something constructive but nothing worth making a note of right now. Oil meanwhile just kinda continues to chill around the 40 level.
So I’ll begin with the long-term chart and work down to the short-term.
So the EUR went and blasted through any kind of resistance that may have been at 1.07 on Thursday (Okay, it admittedly took a 10 minute pause at that level and then continued upwards). Then it continued into resistance to meet 1.09, dove a bit below and now hovers close to the level. Looking at the LT chart, and considering the divergence in the RSI here, I would expect it retests 1.09 and likely eventually retests that longer-term trendline directly above it.
Let’s look at the mid-term chart.
Here again, we see a positive divergence in the RSI with still room to move higher. The only (visible) resistance on this chart is around 1.13. (That actually also exists on the LT chart but I keep forgetting to add a line in that chart). So, given the recent move and the divergence in the RSI, my bias is for further upside to around 1.13 if we go past the 1.10ish level looking at the LT chart. And now I’ll show the short-term chart.
First off, the earlier huge bullish divergence in the RSI has clearly left us with an explosion to the upside. As already noted for the long-term chart, we tested over 1.09 then fell slightly below that level. I think we continue upwards to at least that 1.11ish level (red line above). We might pause then with an attempt at penetrating the resistance, resting, then moving further up.
The move in the past two days was supposedly caused by Draghi ‘disappointing’ the markets by not doing ‘enough’. Or the story is something like that. What’s interesting to note though are the bullish divergences earlier pointing to a potential move higher…and then it supposedly happened because of a reaction to news. Chicken/Egg.
I am further wondering what is going to happen with the interest rates in the US. Most are chanting that the Fed will raise rates. A raise in theory would push down the EUR some. Perhaps not that far, perhaps a lot. Who knows. What I am more interested in though, is…what happens if the Fed doesn’t raise rates?
The EUR seems still poised to make some gains looking at the RSI divergences and recent move. If the Fed doesn’t raise, the EUR might explode much, much, higher.
Still, it doesn’t make much sense for the Fed to not raise at this point (which is why it might come as a huge shock to investors/currencies), and so we likely see the EUR fall a bit if/when the Fed announces a rate increase.
I really am so glad I discovered this Swedish band Kent a few years ago.