USDX is always something to keep an eye on at major levels such as this.
Keep an eye on those Dollar-based majors. $USDOLLAR is leaning on support and risks spec correction
John is talking about the potential for a correction here and with that, the possibility of a spike to the upside on risk currencies IF USDX support breaks. Yes, this is one scenario.
However, I am looking at that chart as price being in a strong up trend. Price failed to break down through channel support with any sort of conviction and we are now consolidating again.
I still like to take the view of “if price is at support, it’s a buy until it’s not”
I can’t see some form of last-minute deal not being done and a pop up in EUR/USD. BUT I don’t think markets have priced in the risk of no deal so in the near term, selling may be the play.
The risk of no deal being done and a Grexit is astronomical. Something that price isn’t reflecting. Is it REALLY a sure thing that a last minute deal will be done? Most probably, yes. But what if…?
Likewise, were the FOMC minutes REALLY that dovish? These minutes were from the meeting before the last, better than expected NFP number. The spike across the majors could be interpreted as just a knee-jerk reaction.
From a shorter term technical point of view, if you’re going to sell EUR/USD then this is the spot. Price is pushing up into resistance with no momentum. I’m playing for a snap back down into it’s range.
Meeting of Euro area finance officials is ongoing, with the major meeting set for Friday. Just understand the risk of headline spikes in either direction as we head deeper into the European session.