EUR/USD Price Forecast – Euro Gives Up Early Gains

The Euro initially tried to rally during the trading session on Wednesday but then gave up the gains rather quickly as it looks like we are perhaps getting ready to continue to the downside. The 1.17 level has offered support so far, but after that vicious candlestick on Tuesday, it is very likely that there will be a bit of follow-through, which we are starting to somewhat see. A breakdown below the 1.17 level then opens up a move towards the 1.16 level, which I think is going to be even more supportive, so I would anticipate a big battle in that general vicinity.

EUR/USD Video 19.08.21

On the other hand, if we were to take out the top of the candlestick for Wednesday, then we may go looking towards 1.18 level again, but I would anticipate a lot of selling pressure in that area that would be very difficult to get beyond, so with that in mind I think you need to keep very nimble, but I still favor the downside as we are in a downtrend, have recently formed the so-called “death cross”, and that of course will attract a certain amount of longer-term bearish traders.

While I am not a big subscriber to that actual set up as a trading signal, the reality is that it does catch a lot of headline attention. Furthermore, we are seeing more money flow into the bond markets in America, as we have a lot of concern about what is going on globally as far as risk appetite is concerned and global growth slowing down. In other words, I believe that the US dollar will continue to attract inflows.

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