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EUR/USD Price Forecast – Euro Recovers After Initial Fall

Christopher Lewis
·2 mins read

The Euro fell significantly during the trading session on Thursday, reaching down towards the 50 day EMA before bouncing significantly to form a bit of a hammer during the US session. Nonetheless, there is a lot of exhaustion just waiting above, so I believe that the 1.19 level still needs to be watched, and therefore I think a lot of sellers will jump right back into the market in that area. Recently, we had seen a massive shooting star that touch the 1.20 level, and that shows where the biggest barrier is.

EUR/USD Video 18.09.20

Having said all of that, the market breaks down below the 1.17 level and the 50 day EMA, it is likely that the market goes down towards the 1.15 handle. This does not necessarily mean that we will see a major downtrend and the Euro, just that the market is probably a bit overextended. Ultimately, this is a market that I think will continue to be very volatile and choppy regardless, so do not be surprised at all that we are bouncing around between the 1.19 handle and the 1.17 handle underneath.

Coronavirus numbers are increasing in the European Union while they are flattening out in the United States, so it does make sense that there might be a bit of a virus trade here. All things being equal, I do believe that this is a market that is trying to figure out which direction to go, but a lot of larger money managers are looking for the Euro to go to the 1.25 handle.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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