The euro continues to rally on Tuesday, as interest rates in the US have fallen a bit, and France has set a curfew to settle political disruptions.
EUR/USD
The euro has risen against the U.S. dollar during the trading session here on Tuesday as rates in America are starting to drift lower. If that continues to be the case, then this could have a little bit of traction.
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Whether or not this actually plays out remains to be seen. But when you look at this chart, it’s hard not to notice the 1.1350 level. That’s an area that was previous support and should have a little bit of market memory attached to it.
Rates rising and failure will be my setup
So, what I'll be looking for if we do continue to go higher is signs of failure there and interest rates climbing in the United States.
I look at this chart and recognize that we are at an area that has been a little bit resistant previously, and I’m sure there are plenty of traders out there who want to take this turnaround. But I need to see 1.1350 completely violated before I think that something has changed for any significant amount of time.
The exception, of course, would be if the situation in France gets better. It’s worth noting that they are imposing some curfews, so maybe at least the political unrest will cool off. We’ll just have to wait and see.
Notice that the previous two candlesticks are inverted hammers. So if we turn around and roll back here, that just shows continued pressure. Again, as far as this is concerned, I’m still looking to short until we break above this level.
If we do finally break above the 1.1350 level, then I can begin to have the conversation of going long if there’s sustained dropping in U.S. rates. But we’ll just have to wait and see.
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