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Christopher Lewis

The Euro fell to kick off the week on Monday, but not very rapidly. The 1.20 level underneath should be significant support based upon previous action, so at the very least I would anticipate some type of bounce in this general vicinity. The 1.20 level extends down to the 1.19 level as far as that support level goes, and therefore I think it is only a matter of time before people will be looking to pick up the Euro again. However, if we were to turn around a break down below the 1.19 level it could signal serious trouble, and that could have this market selling off and reaching towards 1.16 level.

EUR/USD Video 19.01.21

A lot of this will come down to the stimulus package in the United States. There are a lot of questions as to whether or not it will get past and how big it will be. Because of this, I think that we will continue to see a lot of noisy trading at best, but I do think that we will start to see some type of stability reenter the picture here. With that in mind, I like the idea of buying a dip, but I do not know that I have the signal quite yet. I will wait to see if I get some type of hammer or anything along those lines on at least the four hour chart before I start putting money to work.

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I do not have any interest in shorting this pair, because quite frankly I think it is easier to buy the USD/CHF pair based upon the monthly chart if I were to go in that direction, as the two will move in the same direction over the longer term.

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

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