EUR/USD Price Forecast – Euro finding possible salvationThe Euro fell initially during the trading session on Tuesday, as we continue to worry about the debt situation in Italy. This of course had the Europeans selling their own currency and running to safety such as treasuries in the United States, but at the end of the day we are also at major support.
The EUR/USD pair rallied as the Americans woke up, showing signs of life again below the 1.1450 level. If we can break above the top of the sideways action over the last couple of hours of European trading, then the market should go to the 1.15 level above. Ultimately, I believe that if we can break above that level we could also see more momentum jump back into this market.
Overall, it’s likely that the market participants will continue to look at this as value based upon the fact that we have so much in the way of previous support just below current trading levels. When you look at the weekly chart, it’s pretty easy to see that there is a lot of previous resistance in this general vicinity, so therefore there should be a lot of support. Ultimately, this is a market that I think will continue to be very noisy, but in general I think that we are getting relatively close to the idea of a “bottom” in this pair, but if we were to break down below the 1.14 level, that could change things rather drastically. In fact, it would be a bit of a surprise and probably leads to a major issue in the Euro currency itself. I think that there is probably more of a threat to the upside than the downside right now, so be cautious but I remain a bit bullish.