Is it thin liquidity which is helping currency pairs hammer green back?

[Market Projection]

Initially it might have seemed like that but regardless of being in a long term bear trend Euro specially is giving Green back a run for the money as the Dollar index is now under serious pressure and Euro swiftly marching ahead.

The 2 hourly chart of Euro seems to be favoring the bulls of Euro as price already tested the top trend line on Friday and the current price doesn’t seem very far from putting the trend line to test. What improves the probability of breach is the fact that RSI is in a relatively neutral territory and slight strength by Euro at this point could launch prices over 1.35s conservatively stating the target but if this move really takes off it could trade low 1.37 however, at which point we’d be adding to short positions as if there was no tomorrow because as we have said above and previously we remain bear of Euro on long term but that doesn’t mean we should sit out when market is in a short bull run.

Now, looking at the U.S Dollar Index below, we see a rather alarming situation. What looks like a possible triple bottom could be flicked in matter of minutes as a close below 50 d sma would surely add pressure to the downside and thus further supporting our view of a strong move brewing up in Euro/USD. The MACD is in divergence and maintains a downtrend. We have backed Dollar index for some time but at this point and time we exit our Long position because until the upside of this horizontal price movement which lies at over mid 80s isn’t breached it the Dollar Index seems to be leaning towards the downside.

by

Bari Baig
At www.marketprojection.net we make real time minute by minute forecasts