Is the Euro Looking for Support?

28 oct.

It seems like the euro is on the hunt for some support. Could the bulls finally take charge and pull the euro out of its steep decline? The indicators are sending mixed signals. And when I say "indicators," I’m not talking about stochastics, moving averages, or that kind of stuff. I’m referring to the data from COT reports (show sentiment leaning towards a stronger dollar), analysis of options trades (not signaling a reversal), and retail sentiment (which is firmly bearish). And sure, we’ll throw in some chart analysis, but not just for the euro—I'm also looking at the 10-year Treasury yield chart.


What’s particularly important is how the quotes react at the 4.28% and 4.38% levels (marked as 1 and 2 on the chart). So, what do I mean by "how they react"? If the quotes hit resistance at these levels and turn south, the Dollar will likely correct, giving the euro bulls a breather. I highlighted the levels in the euro, the correction to which is very justified for finding liquidity.

But if the quotes 10Y Bonds start to "chop" through those levels, then the Dollar is headed higher and beyond.