EUR/USD Price Forecast – Euro Breaks Through Short-Term Support

The Euro fell almost immediately during the trading session on Wednesday, as we continue to see a lot of noisy downward behavior. Quite frankly, most of this has to do with the strength of the US dollar as it continues to be rushed into. There are plenty of concern out there around the world that have people looking for safety, not the least of which would be the lack of power in the European Union. This is kind of an odd situation, but the EU is struggling to power its corporations and factories.

EUR/USD Video 30.09.21

Furthermore, we have the entire Chinese situation which looks like it is threatening the financial markets, driving money into the bond market in America for safety. That drives up the value of the US dollar, as people demand the same dollars. Furthermore, rates in America are rising which makes that bond yield quite a bit more attractive. The bond yield spread between Germany and the United States is widening even further, so that should continue to put some downward pressure on this market.

I like fading rallies, and I do think that we are going to go down to the 1.16 level. If we break down below there, then it opens up a move down to the psychologically significant 1.15 handle below. To the upside, I have no interest in touching this pair as far as longs are concerned until we clear the 1.1750 level at the very least. That does not seem to be likely at this point, so fading rallies will probably be the way I play this.

For a look at all of today’s economic events, check out our economic calendar.