EUR/USD Price Forecast – Euro Slams Into Previous Support

The Euro is in an interesting crossroads, as we have turned around to recapture the 1.19 level but find ourselves struggling there as it was an area of previous support, and it should now offer resistance. So far it has, but at the end of the day the resistance could extend all the way to the 1.20 level. However, the 200 day EMA sits just below so one would have to think that there should be a significant amount of support in that general vicinity. Breaking the 200 day EMA to the downside will open up a move down to the 1.16 level, an area that was previous support as well.

EUR/USD Video 10.03.21

With all that being said, the Euro has shown itself to be a bit oversold in the last few days, so I think that is part of what we are seeing here, when the market is rallying. It simply trying to correct from an oversold condition during the last several sessions. Regardless, this is a market that has clearly changed its attitude so it either saves itself now, or we drop somewhat significantly. It is not until we break above the 1.20 level that I would be a buyer. In general, I suspect that we are going to continue to see sellers jump into this market to punish it, unless of course the 10 year yield suddenly drops, driving down the value and desirability of the greenback. If that happens, then we will see a much bigger reversal. One thing is for sure, you need to be cautious about your trading position size.

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