The Euro has fallen a bit during the trading session after initially trying to rally, but sits just above the 1.10 level, an area that will obviously attract a lot of attention due to the fact that it is a major round figure. Overall, it’s very likely that this market will continue to see a lot of noise, and although I think it is very negative longer-term, I would not be surprised at all to see a short-term bounce. This makes sense, because the 1.10 level will attract a lot of attention in general.
EUR/USD Forecast Video 13.11.19
Looking at this chart, if we were to break down below the 1.10 level, then it opens up the possibility of a move towards the 1.09 level. Below there, then it opens up a much larger move in the Euro as the market has a gap at the 1.0750 level, and eventually the 1.0450 level which is the 100% Fibonacci retracement level. I think it’s going to take quite some time to get there, but with the ECB likely to be loosening monetary policy in one form or another, and the Federal Reserve standing on the sidelines, the simple monetary policy differential should continue to drive this market lower.
Beyond that, the German ZEW numbers were poor, although better than anticipated. What this shows is that the EU is “less bad” in general, and that seems to hold up through most of the numbers. However, those “less bad” numbers have not necessarily been good. The longer-term trend should continue.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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