EUR/USD Price Forecast – Euro continues to consolidateThe Euro drifted a little bit lower during the trading session on Friday, but only a small amount of distance. The market looks as if it is ready to bounce from the 1.1650 level, but if we do break down below there it’s likely that the 1.16 level will be targeted.
I believe that the Euro fell slightly due to concerns about a couple of headlines crossing the wires early in the session suggesting that there could be a “no deal Brexit”, but at the end of the day I don’t think it really matters. I think it was just an excuse for the market to make a reaction. It looks to me as if we are trying to form some type of short-term bottom to rally from here. However, I recognize that if we break down below the 1.16 level, the market will probably go looking towards 1.15 level after that, as it is a large, round, psychologically significant figure in the bottom of the larger consolidation area that we had been in.
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I believe at this point that the market will try to reach the 1.18 level above, which is the top of the consolidation area, but now it’s just a matter of whether we can do it from here, or if we need to pullback to build up more momentum. If we break down below the 1.15 level, then the downtrend will probably continue, and the next couple of weeks will be crucial as it’s when the volume picks back up in the marketplace as traders have come back from holiday. With the Brexit getting close to being finalized, expect a lot of volatility but eventually I think once things settle down the Euro will start to appreciate in value again.