The Euro has broken down significantly during the week, showing signs of extreme exhaustion. However, we are getting close to a support level in the form of the 1.12 handle, and therefore could see a bit of a bounce. A lot of what we are looking at is due to the Friday reaction to the jobs figure, as people suddenly become concerned that the Federal Reserve may not cut interest rates. That being the case, it’s likely that the market may come to its senses on Monday as the Federal Reserve is most certainly going to cut interest rates. Yes, you can make an argument that the economy is too strong for interest rate cuts, but at this point the Federal Reserve is already suggested interest rate cuts when we knew the economy was doing fairly well.
EUR USD Forecast Video 08.07.19
The 61.8% Fibonacci retracement level has held from a longer-term chart, so at this point longer-term traders are looking to pick up the Euro “on the cheap.” Ultimately, if we can break above the 1.1350 level, then we will try to take out the shooting star. A break above there opens the door to the 1.15 handle, and I do think that it’s only a matter time before that happens. Ultimately, I believe that we are in the process of trying to bottom out, and with that being the case it’s likely that we could find plenty of value hunters. The 1.11 level underneath is massive support, so it’s very likely that the buyers will certainly be there as well.
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This article was originally posted on FX Empire
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