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Christopher Lewis
EUR/USD daily chart, September 18, 2019

The Euro bounced a bit during the trading session on Tuesday from the psychologically and structurally important 1.10 EUR level. At this point, the market is probably going to turn its attention to the Federal Reserve and what it decides to do. After all, the interest rate decision will give not only a bit of an interest rate cut, but it could give a bit of guidance during the statement afterwards. If the Federal Reserve sounds extraordinarily dovish, that could lift this pair but this is essentially a battle between a couple of central banks that are trying to outdo each other in a “race to the bottom.”

EUR/USD Forecast Video 18.09.19

Quite frankly, the US dollar should continue to strengthen against the Euro even if we do get a bounce, mainly because the US economy is relatively stronger than the European Union. With that, I would look at rallies as opportunities to sell, as the 50 day EMA has been so crucial in its resistance. To the downside, the market could very well test the lows again and based upon the fact that we are below the 61.8% Fibonacci retracement level, we could find the market reaching down to the 100% Fibonacci retracement level which is closer to the 1.05 handle.

If we did break above the 50 day EMA, that could change things, perhaps sending the market towards the 1.12 handle, but that would take some type of extremely dovish move by the Federal Reserve, something that is probably asking a bit much at this point in time.

Please let us know what you think in the comments below

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