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Christopher Lewis

The Euro has rallied a bit during the trading session on Monday again, reaching towards the 1.13 level. That of course is a large, round, psychologically significant figure that is going to attract a certain amount of attention, but what is even more important to pay attention to is the fact that we have continued to try to go higher, only to find plenty of selling pressure. In fact, when you look at the weekly chart the recent rallies have hit the 38.2% Fibonacci retracement level on the longer-term downtrend but has failed to break above that area.

EUR/USD Video 30.06.20

To the downside, I do believe that the market could go all the way down to the 1.10 level, and there are enough headwinds in the European Union to make that happen given enough time. Beyond that, there is also the possibility of people run towards the US dollar due to a bit of a safety bid, so having said that it is likely that the Euro will suffer at the hands of some type of move like that, even if it has nothing to do with the Euro itself.

To the upside, I have seen the 1.14 level as massive resistance, and I believe it extends all the way to the 1.15 handle. That is a huge region of resistance, and as a result I think it will be difficult to break above there, and quite frankly we did, a move above the 1.15 level would signify a new uptrend for longer-term traders. These things do not happen rapidly, so fading rallies should continue to work.

For a look at all of today’s economic events, check out our economic calendar.

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