The Euro rally during the week, trying to reach the 1.12 level but has failed to break out above there. That being the case, the market had a good week, but is still very much in a downtrend overall, and a bit of a larger channel, at least in the spirit of the way the market has been trading since March 2018. That being said, not a lot has changed, and even though the last couple of weeks have shown a proclivity on daily charts to strengthen, this is something that we have seen happen several times in the past.
EUR/USD Forecast Video 04.11.19
The 50 week EMA is just above, and hugging the downtrend line of the channel, so even if we do break out to the upside at this point, the market is somewhat limited as to how far I can go without facing a lot of trouble. Beyond that, there are a lot of fundamental reasons to think that the Euro is going to continue to soften after these rallies. The European Central Bank is likely to continue easing monetary policy, therefore it makes sense to start selling at the first signs of weakness, as it should just simply be a bit of continuation from the last couple of years. I believe at this point the market will test the 1.10 level again, but that doesn’t necessarily mean that it’s going to be easy to get down to the lower levels. At this point, I like the idea of fading rallies but may have to drill down to the daily charts to see the trigger.
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This article was originally posted on FX Empire
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