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EUR/USD Price Forecast – Euro fails at large number

The Euro tried to rally a bit during the trading session on Tuesday as we tested a couple of major levels only to find sellers again.
Christopher Lewis
EUR/USD daily chart, August 07, 2019

The Euro initially shot higher during the trading session on Tuesday as traders crushed the greenback, perhaps in reaction to the US/China trade war which is starting to turn into a currency war. However, as soon as the Asians left, we started to see the US dollar picked up strength again. Looking at this chart, there are couple of technical reasons we could have ran into trouble, and therefore the idea of rolling over from here makes quite a bit of sense.

EUR/USD Forecast Video 07.08.19

The 50 day EMA, which is pictured in red on the chart, was perfect resistance during the previous session, and now that we have poked above there and failed, it suggests that the sellers are most certainly going to come back in. With my previous analysis, I had suggested that there was a major resistance barrier between the 1.12 level and the 1.13 level above. Having said that, the 1.12 level had previously been support, and it should now be resistance.

To the downside, the 1.11 level makes quite a bit of sense as it had been a target more than once. All things being equal, I believe that we are simply going to test those lows again. This is a market that has been well supported in that area but we recently broke down through there, only to bounce back towards this moving average. I think this is a simple continuation of the sawtooth pattern that we have been forming for some time. Ultimately, this is a downtrend going forward as well, but it hasn’t been easy. Looking at the chart, it’s obvious that we are simply doing more of the same.

Please let us know what you think in the comments below

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