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Christopher Lewis
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EUR/USD

The Euro fell a bit during the course of the trading session on Tuesday, as we are pressing the very lows from the previous session. If we break down below the bottom of the candlestick for the Monday session, that opens up a move much lower, perhaps down towards the 1.17 handle, maybe even down to the 1.16 level given enough time. Ultimately, this is a market that I think sees a lot of negative pressure anyway, as more money flows into the US bond markets. Yields are taken a bit of a dip lately, and that typically goes right along with the US dollar strength.

EUR/USD Video 21.07.21

To the upside, I think that the 1.1850 level is significant resistance, and it is essentially the “ceiling in the market” at the moment. If we were to break above there, then it is possible that we could go higher, but that would probably only kick off a bit of a correction, not necessarily enough to send this market into an uptrend.

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In general, this is a market that I think continues to see a lot of noisy behavior, and of course choppiness which is typical for this pair. The 50 day EMA is starting to drop, reaching down towards the 200 day EMA. Because of this, the market is preparing itself to have a “death cross” form, which of course is a long-term selling signal for some traders. Nonetheless, this is a market that has been slumping for a while and it certainly looks as if it has nowhere to be bit lower given enough time as the “H pattern” continues.

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

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