EUR/USD Price Forecast – Euro Continues to Plunge
The Euro has fallen rather hard during the course of the trading session on Wednesday, as we are now threatening the 1.12 level. At this point in time, it is obvious that the Euro is in certain trouble, and the US dollar of course is a major beneficiary. With this being the case, it is very likely that we will continue to see further downward pressure, and rallies of course will be sold into. The 1.10 level is my target over the longer term, but we desperately need some type of bounce in order to offer value in the greenback. While you could just short this market right now, you have to be aware the fact that a significant bounce is overdue.
EUR/USD Video 25.11.21
To the upside, the 1.14 level is significant resistance, and we would need to break above there to even remotely threatened the downtrend. Because of this, I like fading any signs of weakness on the short-term rally that we can get involved in. As long as the European Central Bank continues to be very soft with its monetary policy, I see no other route than lower. Furthermore, we also have lockdowns in Austria and at this point even potentially in Germany, which obviously will do no good for the local economy.
The ECB is light years away from being able to tighten monetary policy, and I think you are seeing that expressed in this currency pair. If we can break down below the 1.12 level, then I think we just continue to freefall towards 1.10 level which is structurally much more important. The argument to start buying this market is akin to “catching a falling knife.”
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