EUR/USD Price Forecast – Euro Slams Into Support

The Euro has broken down right off the bat on Monday, as the market came to grips with the coronavirus mutation in the United Kingdom that had a major “risk off” effect on the markets, thereby having everybody buying the US dollar. Given enough time, it does look like we will probably continue to go higher, trying to fill the gap from the open. Keep in mind that the liquidity was almost nonexistent, and as a result the move was probably a bit exaggerated. Nonetheless, this is obviously a major issue for markets to deal with going into Christmas, so it will be interesting to see how things play out. The one thing that you will need to do is be very cautious with the position size that you use.

EUR/USD Video 22.12.20

Longer-term, I think that the US dollar still has issues, mainly due to stimulus and of course the fact that even more is probably coming. With Joe Biden win in the White House, it will almost certainly add to the idea that stimulus is coming down the road. The Federal Reserve is likely to do plenty of stimulus down the road as well, so ultimately this is likely going to be a very noisy market regardless of what happens, and therefore protecting your trading capital is going to be the most important thing.

Underneath, the 1.20 level should continue to offer support and essentially a “floor” in the market. As far selling is concerned, I think simply waiting for an opportunity to go long should continue to be the best way to play this market.

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