The Euro rallied a bit during the trading session on Tuesday, reaching towards the 1.13 level. This area caused a little bit of resistance, and that makes sense considering that we have recently had a negative press conference coming out of the European Central Bank. However, on the other side of the equation we have the Federal Reserve looking very loose with its monetary policy, and therefore I believe that there is somewhat of a limited downside in this market.
EUR/USD Forecast Video 13.03.19
Looking at this chart, the top of the consolidation area is closer to the 1.15 handle, although I don’t think it’s going to be very easy to get there. More likely, we will find a lot of resistance at the 1.14 level. Just below this area, we have the 61.8% Fibonacci retracement level that has offered a massive support, as it has been previous resistance. Looking at this chart, it has been a sudden selloff after the press conference, but you can see that we stop dead in our tracks right where you would expect to see it on longer-term charts. That tells me that the structure of the market is still intact, and therefore you have to be cautious about trying to short expecting some type of breakdown.
All things being equal, I don’t think much has changed other than we had a significant and serious test of support that showed it to hold, although it certainly did bend a bit instead of breaking. As we are closer to the bottom of the consolidation than the time, it makes sense that you favor the upside.
Please let us know what you think in the comments below