The Euro rallied a bit during the trading session on Friday, reaching towards the 50 day EMA, pictured in red on the chart. This also gives very close to the 1.1250 level. That’s an area that has been important more than once, so don’t be surprised at all if we continue to see a lot of selling in that area. If we do break above there, and especially on a daily close, then we could go looking towards 1.1325 handle, and eventually the 1.14 level. However, if we get any bad news out of the China trade talks, that could have a major influence on this pair, driving it much lower. That wouldn’t be much of a surprise, because quite frankly were in a downtrend over the last several months anyway.
EUR/USD Video 13.05.19
We are at the top of the previous support range, so there should be resistance here. Ultimately, I suspect it’s easier to fall than rally from here, but we do have to take both possibilities moved into account. Overall, I believe that it’s going to be much easier to short this market though, reaching down towards the 1.11 handle. If we break down below there, then we could go down to the 1.10 level which is even more supportive and would be even more difficult to break down. If we did, that would be catastrophic for the Euro. I do believe that we are in the middle of trying to bottom as most European economies are doing the same. Overall, I believe that longer-term we are looking to build a base, but I don’t overall quite ready to do that yet.
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This article was originally posted on FX Empire
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