Euro Still Looking for Momentum

Euro Still Looking for Momentum

In forex markets, one of the biggest trends has been characterized by the declines that have been present in the Euro relative to the US Dollar.  Many traders have been looking to determine instances where it might be possible to work against the trend and to start buying Euros at cheaper prices.  For the most part, these decisions have not paid dividends as the Euro continues to fall and the Dollar continues to gain.  So it continues to be important to monitor the chart activity and to assess whether or not there is any possibility these trends will be ending any time soon.

“At this stage, it will be key for the market to look at the debt trends that are seen in the Eurozone,” said Michael Lane, markets analyst at Asia’s Global Forex Broker.  “A good portion of the market had previously discounted these factors but we have seen a reassertion of this trend for most of this year.”  So from a fundamental perspective, there are clear reasons for why the Euro has met selling pressure in recent months.  But for those that are actually looking to start implementing real forex trades in these currencies, it is critical to view the latest support and resistance levels in terms of how they are likely change the underlying trends.

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EUR/USD – Euro vs. US Dollar

Critical Resistance:   1.0840

Critical Support:   1.0750

Trading Stance:  Still Bearish

EUR/USD Forex Strategy:  The pair is still a sell on rallies and this will continue to be the case until we start to see some material breaks of resistance in the 1.0840 zone.  Look to re-establish short positions once prices rise into this area.

Many in the market looking to assess the underlying trend in the US Dollar will look at the the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP).  But for forex traders it is a good idea to look at the base currency values themselves, and here we will look at the underlying downtrend in the EUR/USD itself.  On the short term charts, we can see some slightly positive momentum but there is heavy resistance to be found at 1.0840 and this area can be used to establish new shorts.  Daily RSI has moved out of oversold territory, so there is enough room to extend to the downside once resistance levels are reached.