The Euro initially tried to rally during the trading session on Friday, but then broke down a bit to sliced through the 50 day EMA. At this point in time it’s likely that the market goes down to the 1.10 level which is the next large, round, psychologically significant figure. If we can break down below there, then the market is likely to go down to the 1.09 handle after that. Ultimately, this is a market that should continue to show plenty of negativity over the longer term, considering that the ECB is likely to continue liquefying the markets and loosening monetary policy.
EUR/USD Video 11.11.19
Rallies at this point will more than likely be sold into, and the first signs of exhaustion will be jumped on. The US dollar is king still, and every time it gets a bit “cheap”, it’s an opportunity to pick up value. The Euro will struggle based upon not only the reasons with the ECB, but also from slow growth in the European Union itself. Ultimately, there are a whole host of issues in the European Union, and at the same time the Federal Reserve has made it clear that they are sitting on the sidelines. In other words, they are not cutting rates any further. If that’s going to be the case, then the market is likely to favor the downside going forward. It’s not until we break above the 1.12 level on a weekly chart that I would be convinced to start buying.
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This article was originally posted on FX Empire
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