The Euro has broken through the vital 61.8% Fibonacci retracement level to dig into the support area just below. We have recently seen the market test the 1.11 level for support and bounce, and it now looks as if we are going to go back towards that area. With that in mind, it makes sense that we will probably drive toward that level and then bounce yet again. We have the ECB speaking on Thursday which of course is going to move the markets in general, as we wait to see whether or not they are going to be overly dovish. It’s very likely they will be, but at this point we also have to worry about whether or not the Federal Reserve is going to cut interest rates, or perhaps even suggest that they are going to cut them more than once.
EUR/USD Forecast Video 24.07.19
In this environment, it looks as if the sellers are coming in to perhaps cover themselves from previous long positions ahead of the ECB meeting, but it’s difficult to imagine that we will make a major move between now and Thursday, so this is probably more of a drift lower than anything else. If we do reach towards the 1.11 handle, then I would be interested in buying but more than likely we will just hang around that area until the press conference this Thursday. While it does look somewhat negative, the fact that we have such important news coming in just another day tells me not to read too much into this move, it simply is probably position squaring ahead of the event.
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This article was originally posted on FX Empire
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