EUR/USD Price Forecast – Euro Pulls Back From 200 Day EMA
The Euro pulled back a bit from the 200 day EMA during the trading session on Monday, as it looks like we are starting to get slightly exhausted. The 1.1850 level has offered a little bit of support, which is an area that we have seen matter more than once. However, if we were to turn around a break down below there, then the market could continue to go lower, especially near the 1.18 level which would obviously attract a lot of attention. After all, the Euro has rallied rather significantly until the last 24 hours and had almost certainly gotten a bit overbought.
EUR/USD Video 07.09.21
The market of course does tend to revert to the mean, but if we were to turn around and break above the top of the shooting star, then we would see a potential “blow off top.” That being said, the market is likely to see a bit of a hesitation in the short term, but whether or not we get a major selloff could be a completely different question.
At this point, I think that you can only read so much into the Monday candlestick as it was Labor Day in the United States and Canada, which obviously would sap quite a bit of liquidity later in the day. At this point, I am short this market below 1.1850, and long this market above the top of the shooting star from Friday. In the area in between, I think there is just too much in the way of confusion to figure out whether or not we should be putting money to work. After all, chasing a trade that has rallied this part typically causes issues, but clearly there has been a change in attitude at the same time.
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