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Christopher Lewis

The Euro has rallied during the trading session on Wednesday to reach towards the 1.23 level again. That is an area that has been resistance previously, extending to the 1.25 handle. If we can break above the 1.25 handle, then the market can continue to go much higher. I think a lot of this comes down the stimulus in the United States, and when you look at the longer-term charts, you can see just how important the area between the 1.23 level and the 1.25 level after that.

EUR/USD Video 31.12.20

At this point in time, the market is likely to continue to see buyers on dips though, due to that stimulus mentioned previously. This is not necessarily an indictment on the European Union being so strong, rather it is an indictment on the damage that stimulus will do to the US dollar. At this point, the 1.20 level underneath is the “floor the market”, and also has the 50 day EMA crossing above it, which will signify a certain amount of technical support as well. At this point in time, the market is likely to continue to go back and forth in this general vicinity until we make some type of definitive move, probably sometime after the jobs number comes out and about a week.

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Between now and then, I would anticipate a lot of choppiness in this pair, just as I would in the general Forex world. All things being equal, I think this is going to be very difficult and short-term trading going forward for the immediate term, but it clearly favors the upside in general.

For a look at all of today’s economic events, check out our economic calendar.

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