The Euro initially fell during the trading session on Monday but found enough support at the 1.13 level to turn things back around and rally a bit. There is a minor trend line there, which could offer a bit of support as well. Overall, I think that we will eventually get a bounce, because quite frankly both of the central banks are in a world of hurt. The idea that the Federal Reserve is suddenly going to change their attitude seems a bit much.
On the other hand, the European Union continues to struggle with poor economic figures, as the market has a lot to digest these days. With both of these central banks looking very loose with their monetary policy, I do believe it’s only a matter time before we bounced again. If we can break above the top of the candle stick for the Monday session, then I think we go back towards the 1.14 handle, and then eventually the 1.15 level after that. Ultimately, I think that even if we do break down from here there is even more support closer to the 1.12 level. That level is not only structurally important, but it is also where we see the 61.8% Fibonacci retracement level. Because of this, I think there are plenty of reasons to believe that eventually the buyers come back and push this pair higher. I don’t expect an explosive move, rather I expect more overall consolidation in this general vicinity.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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