EUR/USD forecast for the week of July 25, 2016, Technical Analysis

The EUR/USD pair is one that has been extraordinarily volatile over the last several months, but at this point in time we are finally broken down below the 1.10 level. I believe that we will continue to go lower but it is going to be a grind lower as opposed to a massive breakdown. I do think that the Euro is overvalued, and that we will reach down to the 1.05 level below. Rallies at this point in time should be selling opportunities on short-term charts, as the European Union still continues to be an area where money runs from. The uncertainty when it comes to the British leaving the European Union of course has been very negative for the European Union, and we are starting to see a bit of a slowdown when it comes to economic numbers. With this being the case, I feel that the Euro continues to have massive issues overall, while the US dollar of course still has the stigma of being the “safety currency” for the Forex markets. Because of this, I anticipate that we will continue to see the flight to America.

I think that the 1.08 level below is probably the initial target, but every time we rally, it’s likely that we will start selling. It’s not until we break above the 1.12 level that I would consider buying, and possibly even waiting until we get above the uptrend line that had This market going to the upside. Ultimately, this is a market that will probably be easier to trade off of short-term charts, but longer-term I still believe that people are not sellers, so if you have the ability to sit through quite a bit of volatility, it’s possible to hang onto the trade. Keep in mind that there are still quite a few variables out there that we are waiting to see come out before we can truly make the larger move. We still don’t know the full effect of the British leaving, so as long as we have uncertainty, the euro will fall.