EUR/USD Price Forecast – Euro rallies hard on MondayThe Euro rallied rather significantly during the trading session on Monday to kick off the week, showing signs of strength and pressing the 1.17 level early during New York trading.
The Euro rallied significantly during the trading session on Monday, reaching towards 1.17 level where we had seen a lot of selling last week. Ultimately, this is a marketplace that should continue to be very noisy, but it looks as if we do have a bit of an upward proclivity and I would point out that the longer-term consolidation continues with the 1.18 level above being a target. Underneath, I see the 1.15 level as support but I don’t know that we are going to break out of this range anytime soon. I think it will be very noisy, and it’ll be interesting to see whether we can finally build up the necessary momentum to make the longer-term move.
Quite frankly, I think there are so many moving pieces right now that it’s good to be difficult to do that, as the ECB looks to say soft for a while, and of course we have to worry about emerging market debt being held by European banks. In other words, I think there are so many different things going back and forth that it’s good to be difficult for this market to find traction in one direction or another. I believe that short-term trading continues to drive this pair, and therefore you will have to pay attention to large, round, psychologically significant figures.
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If we can break above the 1.18 handle, then the market then goes to the 1.20 level above. That’s an area that will cause a lot of resistance as well, both psychologically and historically. I do favor the upside longer-term, but I don’t know that we are ready to do so quite yet.