EUR/USD Price Forecast – Euro Continues to Plow Lower

The Euro has broken down significantly during the trading session on Monday, as we have seen the US dollar strengthening in general. That being said, it is not exactly as if we are running away to the downside, but we are clearly seen quite a bit of pressure. With that being the case, think it is only a matter of time before we would see rallies sold into, as we are starting to grind lower based upon a flood of liquidity running into the bond market, driving yields in the United States lower as traders are looking for safety.

EUR/USD Video 20.07.21

Furthermore, the Euro has been slumping a bit for a while, so this is just a continuation of the overall malaise that the common currency has attached to itself right now. The Delta variant, problems in France with the possibility of locking down the economy via vaccine passports, and of course the fact that the German bond market offers even lower yields than the United States suggests that this pair probably drops even further.

Currently, I believe that if we do rally from here, the 1.1850 level will be a bit of a significant ceiling in the market. I would be a seller on signs of exhaustion near that area or on even smaller bounces that show long wicks of exhaustion going forward. Because of this, the market is likely to continue seeing a lot of noisy behavior, but at the end of the day I believe that this is a market that will try to find the 1.16 level although it may be a slow grind lower as is typical for this pair anyway.

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