The Euro has initially gapped higher to kick off the week, reaching towards the gap to fill it, breaking below there to only turn around and reach towards the 1.10 level above. The 1.10 level is of course a large, round, psychologically significant figure that should come into play and keep the down trend somewhat intact. However, a break above that level could be a very bullish sign and perhaps send the market into a potential trend change. A break above the downtrend line would be a very bullish start, but the breakdown candle is back from a couple of weeks.
EUR USD Forecast Video 08.10.19
The downtrend line being broken to the upside also brings on the possibility of the 50 day EMA being targeted. That also as resistance, but if we can break above there then it shows a significant change in the overall trend in attitude and could send this pair much higher. All of that being said, the easier path is more likely to the downside, perhaps reaching down towards the 1.09 level underneath. That is a level that should be thought of as potential support, but if we can break down below there, then the market goes even further to the downside, perhaps reaching towards the 1.0750 level which has been the scene of a major gap previously and could provide a nice target for longer-term traders to go looking towards, as that typically is the case. All things being equal, this is a market that should give us an opportunity to roll over.
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This article was originally posted on FX Empire
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