The Euro initially gapped higher to kick off the trading session on Monday, but then pulled back to test the crucial 1.10 level. By doing so, it has shown significant strength but quite frankly at this point I think we are essentially stuck in consolidation. This is the normal attitude of the Euro so don’t be surprised at all. The 1.10 level of course is a large, round, psychologically significant figure so it does make sense that a certain amount of support will be built into the number. To the upside, we have seen the 1.11 level offer resistance previously, and most certainly the 1.12 level. Beyond that, the 200 day EMA is also in the same neighborhood.
EUR USD Forecast Video 03.12.19
With that in mind, I like the idea of fading rallies in the Euro, as it has been in a downtrend for three years. Quite frankly, not much has changed and although we are seeing signs of stabilization in some sectors of the EU, we are still looking at a European Union that is falling behind the United States. That being said, there will be the occasional bounce, and the fact that we saw this bounce at the 1.10 level should not be much of a surprise either. I’m not bullish, I’m still very bearish of this pair but recognize that perhaps we may have the occasional bounce that we need to pay attention to. This is one of those, but I’m not willing to play the “back-and-forth” game that could easily come into play. With this, I have no interest in buying, it will simply wait for the signs of exhaustion to take advantage of.
This article was originally posted on FX Empire
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