EUR/USD Price Forecast – Euro rallies to open the weekThe Euro rallied open the week on Monday, reaching towards 1.18 level. It looks as if the market is reacting to that area as resistance though, so I would anticipate a short-term pullback. There is significant resistance above at the 1.1850 level, so expect a struggle going forward.
The Euro rallied initially during the day on Monday but found enough resistance at the 1.18 level to turn things around and form a little bit of a resistive pullback. It looks as if the market is likely to struggle at the 1.1850 level above, an area that has been significant resistance on the weekly chart as well. I anticipate that short-term pullback, but then buyers to come back in somewhere around the 1.1750 level. Below there, the 1.17 level also offer support. I have no interest in shorting this market, at least not right now, but would do so on an exhaustive daily candle near the previously mentioned 1.1850 level.
The US dollar will continue to move due to risk appetite and of course the trade war talk. However, I think that the main driver of this market is going to be a sign of European solidarity, as Merkel has solidified her position, and of course the Italians seem to be willing to work with the EU much more than originally thought. Ultimately, I believe that the market will continue to be noisy, and I think that the longer-term charts look very much like consolidation, with the 1.15 level underneath being the bottom, and the 1.1850 level being the top. If we were to break above the 1.1850 level on a daily close, then I think the market could go to the 1.20 level after that. Expect volatility regardless what happens next.