EUR/USD Price Forecast – Euro Grind Lower

The Euro has broken down a bit during the trading session on Thursday to slice through the Wednesday hammer. This of course is a negative sign, but we are in the midst of a 100 point support level that I believe extends down to the 1.19 handle. In other words, even though this is bearish action I am not willing to jump in and start shorting right away. I do think that given enough time we probably see buyers come back, but if we were to break down below the 1.19 level then I think it opens up another 300 pips to the downside.

EUR/USD Video 05.02.21

The European Union is clearly suffering at the hands of the coronavirus and lack of vaccine distribution. The economic picture in the European Union has been souring a bit as of late, so I do think that it is probably only a matter of time before the US dollar gets a little bit of a boost. However, we are still very much in the midst of a consolidation phase, so that has to be taken into account. With that in mind I believe that until proven otherwise, there is high likelihood of at least a short-term bounce. This is not a tradable conviction that I have, just an observation clearly, things are starting to change in favor of the greenback again, perhaps if for no other reason than the fact that it was oversold to begin with. The 1.23 level above is a massive resistance barrier on the higher time frames, so that is something that should be taken into account.

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