EUR/USD Weekly Price Forecast – Euro finds buyersThe Euro fell during most of the week but turned around towards the end to reach towards the 1.14 handle. This is a strong turn of events, forming a nice-looking hammer from the 1.13 level which had to hold.
I think that most of what we have seen during the week suggests that the Euro isn’t quite ready to fall apart. However, the fact that we have formed a hammer here suggests to me that if we were to break down below the 1.13 level, that would be very negative indeed. If we do break higher, I think that the 1.15 level is a major resistance barrier, and if we can break above that level, then I think the market could go to the 1.1650 level. I anticipate that there is going to be a lot of back-and-forth over the next several days, if not weeks.
EUR/USD Video 05.11.18
The Euro of course is being held hostage by the Italian debt situation, and of course risk appetite. Higher interest rates in the United States will continue to put downward pressure on this market as well. I think a bounce at this point is probably going to be more or less structurally induced and not necessarily confidence induced, meaning that the first sign of bad news traders will probably be looking to bail on a long position.
If we do break down below the 1.13 level, then I believe that the market goes and looks towards the 1.12 level, followed by the 1.10 level. The 1.12 level coincides nicely with the 61.8% Fibonacci retracement level, which will attract a lot of algorithmic trading as well. At this point, I still think there’s downward pressure, but a relief rally is probably necessary after the brutal selloff.