The Euro has broken down after initially trying to rally during the trading session on Wednesday, as we await the Friday ECB meeting. At this point, it looks as if the Europeans are likely to cut interest rates, so it does make a certain amount of sense that the Euro would take it on the chin. All things been equal though, this is a market that has been in a downtrend anyway, so it’s not a huge surprise to think that we would start falling. It the European Central Bank is very likely to find a significant amount of quantitative easing coming in the future, and as a result it makes quite a bit of sense that the US dollar would be favored as the US Treasury markets offer positive rates, as the European Union offers -ones.
Euro to Dollar Forecast Video 11.09.19
At this point, the market looks likely to test the bottom, and then perhaps even go further than that. The Fibonacci traders out there will be looking for the 100% Fibonacci retracement level which is closer to the 1.05 region. Regardless, I see a significant amount of resistance in the form of the 50 day EMA which is painted in red, and that of course the 1.11 EUR level. If we get some type of pop higher after the ECB press conference, I will be looking for signs of exhaustion to fade this market. We are in a long-term structural downtrend and that cannot be forgotten.
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This article was originally posted on FX Empire
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