The Euro has fallen over the last several weeks, continuing a longer-term downtrend. The area between 1.10 EUR and 1.11 EUR is massive support, and it does make sense that we have struggled a bit to get through it. That’s not a huge surprise, it’s a major level on the longer-term charts but at this point it’s obvious that although the Federal Reserve is likely to continue cutting rates, the reality is that the European Union is going to struggle to get its economy off the floor. As long as that’s going to be the case, I suspect that the Euro continues to drive lower and eventually break that crucial 1.10 EUR level.
EUR/USD Video 26.08.19
Looking at the longer-term charts, the 50 day EMA which is painted in red on my chart does look as if it has been paid much attention to over the last couple of months, and I think we will continue to see that play out. All things being equal, I believe that market participants will continue to be looking for shorting opportunities. A rally at this point is a nice opportunity to get short again. Beyond that, we are well below the 61.8% Fibonacci retracement level, which of course is a major trading factor as well. Typically, when you break down below that you eventually go looking towards the 100% Fibonacci retracement level, which is closer to the 1.05 EUR level. At this point, that is my longer-term target unless of course something changes rather drastically.
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This article was originally posted on FX Empire
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