What do you make of the euro break of 1.3500 and the reversal?
It was below 1.3500 for less than 2 hours but the barriers are busted. Still longs were barely squeezed and now the euro is fractionally higher at 1.3527.
The double-doji that’s shaping up on the daily chart points to a big move in the days ahead. On the one hand, there’s been virtually no bounce from the beating at the start of the week. On the other, the selling stopped despite some poor headlines in Europe.
EURUSD daily
But there’s no fence-sitting here. I still like the downside and I think there’s some short-covering late in the week at work.
It’s not a big week in Europe next week. The highlights are the German/French PMIs along with the IFO survey, the numbers have been disappointing lately so that could help.
The better bet might be on the other side of the trade where the US dollar could benefit from CPI or durable goods orders. Signs from the Philly Fed and elsewhere point to a pickup in orders and confirmation would get the dollar bulls excited about Fed hikes again.
