Now that the US midterm elections are out of the way, the Euro has gone back and forth and tested major resistance above. However, we couldn’t break above the 1.15 level so it makes sense that we pull back towards the 1.14 handle. At that point, we saw a little bit of a bounce and although I think we are still very much in a heavy market, I don’t know that I would look for some type of major break down here. I think we are simply drifting around between the 1.13 level on the bottom, and the 1.15 level on the top. If we can break above the resistance, then we could go towards the 1.16 handle next. The market has been very choppy overall, and I think that the US dollar continues to be a strong currency as the Federal Reserve is likely to raise interest rates at least the handful of times, so it makes sense that we continue to see greenback strength.
Euro to Dollar Forecast Video 09.11.18
Even if we do rally, I suspect that you are going to be better served waiting for an exhaustive candle or a rollover above to start selling. If we can break down below the 1.13 level, then I think the market probably unwinds down to the 1.12 handle, perhaps followed by the 1.10 level. Remember that the Italian situation hasn’t gone anywhere, and that this rally is showing signs of weakness over the last couple of days already. With that, I’m simply waiting for an opportunity to short the Euro.
This article was originally posted on FX Empire
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