EUR/USD Price Forecast – Forming a base?The Euro has been relatively choppy during early trading on Wednesday, as the market seems to be trying to form some type of basing pattern near the 1.1550 level. Below there, significant bids have been found near the 1.15 handle as it is structurally and psychologically important to the longer-term attitude of the market.
The Euro has both rallied and pulled back during early trading on Wednesday, as we continue to see a lot of choppy conditions in the Forex world. The 1.15 level is structurally important from a longer-term standpoint, and of course is a psychological standpoint. It had been major resistance from 2014 to 2017, so breaking out of it was in fact a major event. However, we have found ourselves rolling over slightly as the ECB has suggested that perhaps quantitative easing is farther away than the market had anticipated.
It is because of the phenomenon known as “market memory” that we should see a reaction to this area again. So far, the 1.15 level has held as support, and I don’t expect that the change in the short term. If we did break down below that level, it would be a significant change of attitude in this pair. Granted, there are a multitude of issues in the European Union right now, and the defective safety currency for most of the world is the US dollar, so a break down could be sudden based upon some type of headline.
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However, all things being equal it’s likely that we will continue to see significant bidding near the 1.15 handle, as it seems to be a structural “floor” in the longer-term attitude. It is because of this that I think we will see a lot of consolidation over the next several days. Range bound systems are to be deployed.