EUR/USD Weekly Price Forecast – Euro Falling Towards Major SupportThe Euro initially tried to rally during the week, but then broke down rather significantly. It looks as if we are trying to test the bottom of the recent consolidation.
The Euro initially tried to rally during the week but then broke down to reach towards the 1.10 level as it has become obvious that the ECB is leaning very dovish and accommodative with monetary policy. The 1.10 level underneath is support, based upon the recent rectangle that the market has been bouncing around in over the last couple of months. The top of course is the 1.12 level, and therefore as we are approaching the bottom we may or may not get a bounce from here. I would wait to see what the Monday close of business, but if it is resilient at that level, then I am willing to buy it. However, if we were to close down below the level on the daily chart, then I believe that the market goes looking towards the 1.09 level next.
EUR/USD Video 27.01.20
We are in a longer term downtrend, and I believe that the gap underneath offers plenty of support. That could make for a nice target if we get that breakdown, and with the comments that Christine Largarde made at the last press conference, it certainly looks as if the ECB is willing to let the value of the Euro break down drastically. Rallies at this point are possible, but I don’t know that we can break above the 1.12 level based upon the reaction to that level a month ago. The 50 week EMA also is leaning to the downside and has offered dynamic resistance more than once. In general, this is a market that looks like it needs to make a decision but it’s obvious that the sellers still have a lot to say.
Please let us know what you think in the comments below