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Christopher Lewis

The Euro initially rally during the trading session on Monday but gave back quite a bit of the gains to break down below the shooting star that had formed on Friday. This shows that the market continues to see a lot of bearish pressure, and it should be noted that the US dollar is strengthening in general during the trading session on Monday. This is a market that has been grinding back and forth in a range for some time, but when you look at the longer-term charts, we are most certainly in a downtrend. The 1.0750 level underneath is support, and if the market can break down below there it is highly likely that we drop another 100 points at the very least, if not a move down to the 1.05 handle.

EUR/USD Video 12.05.20

On the other hand, the market can break above the shooting star from the trading session on Friday, then it is likely we may try to go a little higher, perhaps to the 1.0950 level above. That begins a significant amount of resistance that extends to the 1.10 level above. All things being equal though, both the 50 and the 200 day EMA are sloping lower and bringing momentum to the downside going forward. At this point, the European Union continues to have a lot of issues, and it is difficult to imagine a scenario where the Euro takes off as a result. Not the least of which will be the German courts deciding whether or not the ECB buying corporate bonds is even legal according to German law.

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