The Euro initially tried to rally during the week, and then shot much higher on Wednesday as the Federal Reserve stepped into the arena and suggested that an interest rate hike by the end of 2019 was all but impossible. However, we have seen a complete reversal of that which of course is a very negative sign. Ultimately, there is a significant amount of support below at the 1.12 level, an area that should continue to be very important as it is the 61.8% Fibonacci retracement level of a much larger move. However, if we do break down through there I think it’s very likely that the market could go to the 1.10 level. That being said, it is not my base case at the moment.
EUR USD Forecast Video 25.03.19
Looking at the daily charts, and I think that’s the chart that you will probably be forced to work with here, possibly lower time frames as we are stuck, I suspect that the buyers will come in relatively soon. I do not think that we are ready to break down, but I do recognize that anything is possible. The German economic numbers continue to soften, which of course is very negative for the Euro but at the same time we have the US dollar that has no central bank support underneath it. I anticipate this will continue to be a back and forth short-term traders type of situation, and therefore longer-term traders will probably be on the sidelines until we can break out of this rectangle that I have drawn on the chart.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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