EUR/USD Price Forecast – Euro continues to hang on by its fingernailsThe Euro fell again during the trading session on Tuesday, as we continue to see a lot of selling pressure. At this point, I think it makes sense that you can’t buy this pair, because quite frankly not only do we have very negative technical analysis, we have no fundamental reason to think things are changing anytime soon either.
The Euro went back and forth during the trading session on Tuesday, as we are well below the 1.11 EUR level. That being said though, there is a lot of support underneath that extends all the way down to the 1.10 EUR level next. All things being equal, I do think that we will test that level and eventually break through it. This is mainly due to interest rate differential widening between the United States and Europe. Even though the bonds in America continue to attract a lot of money, interest rate differential dictates that money needs to continue to flow into America because we have positive returns on bonds in the United States, while the European Union features negative rates. It’s a simple matter of “money goes to where it’s treated best.”
EUR/USD Forecast Video 21.08.19
From a technical analysis standpoint, the 1.10 level is massive support, but if we can get below there I think we are probably looking at a move down to the 100% Fibonacci retracement level, which is closer to the 1.05 EUR level. I believe ultimately this is a market that is going to continue to go much lower, because typically when we do break down below the 61.8% Fibonacci retracement level, it’s very likely for market to go down to that 100% Fibonacci retracement level, as history dictates. To the upside, if we broke above the 1.12 handle, then possibly we could rally to the 1.1350 level but that seems to be less likely these days.
Please let us know what you think in the comments below