Monday February 1, 2021 - 11:39:54 GMT
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Why is the EURUSD Trading Weak?
Coming into the year the consensus was for continued dollar weakness and EURUSD strength. What we have seen is a mixed dollar. and weaker EURUSD. So the question is,
Why is the EURUSD trading weak?
1) Pandemic rearing its ugly head and resulting EU lockdowns (note Germany) has pushed out the economic recovery. US is outperforming EU
2) Slow vaccine rollout has been a factor as well
3) ECB talking heads have engaged in some verbal intervention
4) Price action suggests EUR is being used as a carry trade currency.
5) Unwinding of long EURGBP positions post-Brexit deal
If the dollar trends were up EURUSD would be lower. Currently, it seems to be a cat snd mouse game due to push-pull out of EUR crosses,
Watch 1.2050 and 1.21 as pivotal in determining whether it can make a run at 1.20. More key stops on the down than upside.
Current range 1.2054-1.2155
As this one hour Amazing Trader chart shows, the current momentum (episode) is pointing down Expect some caution given repeated false starts below 1.21 but a solid break of 1.2054-58 (and then 1.2050) would open the door for a potential run at 1.2000-10.
Note, as explained in the AT Ladder Strategy, there is often an acceleration in the direction of the trend (episode) after a third AT ladder line is formed (see chart below).<br />
Jay Meisler, co-founder
Global-View.com
[email protected]
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