The Euro rallied a bit during the trading session on Tuesday to reach towards the 1.11 handle, but that’s the middle of a larger consolidation area that we have been in. The 50 day EMA is offering support, and more importantly curling higher. That being said though, there is a significant amount of resistance above, near the 1.12 handle. This is a major resistance barrier that also features the 200 day EMA just below it. With that, it’s very likely that the market will continue to see a lot of choppy back and forth.
EUR/USD Forecast Video 11.12.19
I expect that this rally will be sold like many others and should keep in mind that the longer-term trend is most definitely to the downside. With all of that, this is a short-term bullish signal but the range it is so tight that it’s difficult to get overly excited. Part of the reaction was probably due to the German ZEW numbers coming out tenfold of what they were expected to be. Remember, Germany is a major driver of the European Union, and therefore when you trade the Euro you are essentially trading the Deutschmark.
That being said, there are still plenty of reasons to think that the European Union will struggle, and that the European Central Bank will continue its loose monetary policy. That should continue to keep the downward pressure on the Euro overall so I am simply looking for signs of exhaustion that I can start fading again. This is all leading up to short-term trading, as longer-term trading has been far too choppy to hang on to.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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